Nov. 25 (Bloomberg) -- Defense Secretary Robert Gates will remain at his post under incoming President Barack Obama, according to two people familiar with the transition.

Gates was appointed as secretary two years ago by President George W. Bush and has served mostly under other Republican chief executives in national security positions during his four- decade government career.

Obama has pledged to appoint at least one Republican to his Cabinet. On Oct. 2, Obama adviser Richard Danzig -- himself mentioned as a possible Pentagon chief -- told reporters: “Secretary Gates has been a good secretary of defense. I think he’d be an even better one in the Obama administration.”

Retaining Gates would provide continuity at the Pentagon as about 178,000 U.S. military personnel are deployed in Iraq and Afghanistan and the Obama administration focuses on easing the global credit crisis.

Defense Department press secretary Geoff Morrell declined to comment on whether Gates would be reappointed, as did Brooke Anderson, national-security spokeswoman for Obama’s transition team. Politico and ABC News earlier reported that Gates would stay on.

Retired Marine General James L. Jones, who once commanded North Atlantic Treaty Organization forces in Europe, is expected to be named White House national security adviser, according to people familiar with the transition.

Steinberg, Rice

Citing unidentified Democrats, Politico said James Steinberg will be named deputy secretary of state, Susan Rice will be named as ambassador to the United Nations and retired Navy Admiral Dennis Blair will be tapped as director of national intelligence. Blair formerly commanded U.S. forces in the Pacific.

Steinberg, 55, served as deputy national security adviser under President Bill Clinton, and Rice, 44, was assistant secretary of state for African affairs during that administration. She was a national security adviser to Obama during his presidential campaign and isn’t related to Secretary of State Condoleezza Rice.

Tom Donilon, 53, is the top candidate to be Jones’s deputy, the officials told Politico. He was chief of staff at the State Department under President Clinton.

Jones, 64, insisted on what Politico described as a commanding role as head of the National Security Council, the officials said.

Clinton at State

Senator Hillary Clinton, 61, is likely to be named secretary of State after the Nov. 27 Thanksgiving holiday, according to an Obama aide.

Gates, 65, has won plaudits from Democrats and Republicans alike during his two years as defense secretary. They say he has rebuilt relations and credibility with lawmakers and uniformed senior officers that had frayed under Gates’s predecessor, Donald Rumsfeld.

Former Defense Secretary William Cohen, a Republican who served under Clinton, said earlier this month that Gates would be an “outstanding” choice for Obama. Cohen said Gates would have to stay on the job for “a minimum of a year, I’d prefer to see two,” to ensure proper continuity.

Lawmakers have praised Gates for restoring accountability to his sprawling department, which accounts for a fifth of the $3 trillion federal budget.

Early in his tenure, in 2007, Gates fired Army Secretary Francis Harvey and the commanding general of Walter Reed Army Medical Center after the Washington Post revealed deficiencies in outpatient care for wounded soldiers at the facility in Washington.

Air Force Dismissals

Earlier this year, Gates fired Air Force Chief of Staff Michael Moseley and the service’s secretary, Michael Wynne, over problems in the handling and storage of nuclear weapons.

Gates has steered a middle course in dealing with Iraq, a conflict Obama opposed before it started and often criticized during his presidential campaign as a diversion from more serious problems such as Afghanistan.

Shortly before being named to head the Pentagon in late 2006, Gates was a member of a bipartisan panel that recommended a drawdown in U.S. forces. Nonetheless, as defense secretary he implemented Bush’s decision to add 30,000 troops.

More recently, as security conditions in Iraq have improved and most of the additional military personnel have returned home, Gates has expressed hopes for deeper drawdowns. During the presidential campaign, Obama advocated removing all U.S. combat forces within 16 months. The Iraqi parliament is considering an accord negotiated with the U.S. that would allow American forces to stay in the country until 2011.

Gates spent most of his government career in the Central Intelligence Agency, rising from a staff analyst job to head the agency from 1991 to 1993. He was deputy national security adviser to President George H.W. Bush from 1989 to 1991.

Before joining the Bush administration, Gates was president of Texas A&M University at College Station from 2002 to 2006.

To contact the reporter on this story: Anthony Capaccio at acapaccio@bloomberg.netKen Fireman in Washington at kfireman1@bloomberg.net

Last Updated: November 25, 2008 18:56 EST