In another decisive break with eight years of Republican rule, reports said Obama had chosen Nobel prize-winning physicist Steven Chu, a strong advocate of alternative and renewable energy, to be his energy secretary.

At a news conference, Obama did not comment on the mooted nomination of Chu, the director of the Lawrence Berkeley National Laboratory who would take center-stage in the new administration's offensive against climate change.

But he did nominate Daschle as secretary of health and human services, and said the former South Dakota senator would also serve as director of a new White House Office of Health Reform.

The president-elect noted that health insurance premiums have nearly doubled under President George W. Bush and 45 million Americans lack any insurance at all.

"This simply cannot continue. The runaway cost of health care is punishing families and businesses across our country," he said.

"The time has come -- this year, in this new administration -- to modernize our health care system for the 21st century; to reduce costs for families and businesses; and to finally provide affordable, accessible health care for every American."

In the 61-year-old Daschle, Obama brings a trusted and moderate ally to a goal that has eluded the Democrats for years in a country long suspicious of European-style "socialized" medicine.

But the president-elect could face anxiety about the costs of his health plan at a time of economic recession and heavy government commitments to the financial and perhaps auto industries.

"Well, I ask a different question -- I ask how we can afford not to," he said. "It's not something that we can sort of put off because we're in an emergency. This is part of the emergency."

Mounting job losses are accompanying the biting recession, and for most Americans reliant on employer-based coverage, that means the loss of their health insurance in the absence of a national government scheme.

The last major health care reform attempt by a Democratic president, piloted by Hillary Clinton during her husband Bill's administration, ended in a notorious failure.

But the political climate appears more favorable now, with the Democrats in strong command of the next Congress and many companies -- including the crippled auto industry -- crying out for health care reform.

Obama's plan stops short of mandatory insurance, except for children. But it would offer all Americans the choice of keeping their employer-provided coverage or opting for a government-run scheme.

Daschle said fixing health care was "our largest domestic policy challenge."

"We have the most expensive health care system in the world, but are not the healthiest nation in the world. Our growing costs are unsustainable, and the plight of the uninsured is unconscionable," he said.

"Addressing our health care challenges will not only mean healthier and longer lives for millions; it will also make American companies more competitive, address the cause of half of all of our personal bankruptcies and foreclosures, and help pull our economy out of its current tailspin."

The pick of Chu as energy secretary was reported by the Washington Post and the Los Angeles Times, which said Obama had also chosen former Environmental Protection Agency chief Carol Browner to head a new White House team overseeing energy, environment and climate policies.

"This is a team with a keen interest in addressing climate change, and the talent and skills to get the job done," said Eileen Claussen, president of the Pew Center on Global Climate Change.

Bush wrenched the United States out of the international Kyoto treaty against global warming, and other nations are attentively watching for Obama's intentions as a post-Kyoto pact takes shape at negotiations in Poland.

"The United States under president Obama's leadership is determined to rejoin the world community in its efforts to deal with this issue," Senator John Kerry, Obama's envoy to the UN talks in Poznan, said Thursday.

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