The reluctant announcement makes Massachusetts Senator John Kerry the likely choice to be the nation's next top diplomat when Hillary Rodham Clinton departs soon.
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Rice withdrew when it became clear her political troubles were not going away, and support inside the White House for her potential nomination had been waning in recent days, administration officials said.
In another major part of the upcoming Cabinet shake-up for President Barack Obama's second term, former Republican Senator Chuck Hagel of Nebraska now is seen as the front-runner to be defense secretary, with official word expected as soon as next week.
Obama and Hagel (Photo: Reuters)
For the newly re-elected president, Rice's withdrawal was a sharp political setback and a sign of the difficulties Obama faces in a time of divided and divisive government. Already, he had been privately weighing whether picking Rice would cost him political capital he would need on later votes.
Attention now shifts to Kerry, who came close to winning the presidency in 2004 and has been seen as desiring the State job. In a statement, he made no mention of his own candidacy but praised Rice, who was an adviser to him in his presidential bid.
Susan Rice at the UN. (Photo: AFP)
Kerry was an early backer of Obama and was under consideration to become his first secretary of state. Obama has dispatched Kerry to foreign hot spots on his behalf. Kerry played the role of Republican Mitt Romney during Obama's presidential debate preparations this year.
The longtime senator would be almost certain to be easily confirmed by his colleagues on Capitol Hill.
If Obama taps Kerry for State, the president will create a potential problem for Democrats by opening a Senate seat - one that recently defeated Republican Sen. Scott Brown is eyeing.
Brown had been elected as Massachusetts' other senator in January 2010 after Democrat Ted Kennedy died, stunning the political world as he took the seat held by Kennedy for decades. Brown lost that seat in the November election.
Rice's decision comes ahead of the anticipated release next week of a report by an Accountability Review Board into the attack on the Benghazi mission. The report ordered by Clinton, focuses on the run-up to and the actual attack and is not expected to mention Rice's role in its aftermath.
Clinton is to testify about the report before Congress next Thursday.
Hagel, a former Republican senator from Nebraska, is a Vietnam veteran, served two terms in the Senate and was a senior member of the Foreign Relations Committee.
Obama and Hagel became close while they served in the Senate and traveled overseas together. Hagel has been critical of his party since leaving the Senate in 2008, saying the Republican party had moved too far right.
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