(AFP) – Jun 4, 2008

WASHINGTON (AFP) — Hillary Clinton Wednesday took a significant step towards healing the rift with her victorious Democratic rival Barack Obama, but stopped short of abandoning her own presidential bid.

The former US first lady has yet to concede the Democratic nominating race to the charismatic Illinois senator, even though Obama clinched the number of delegates needed to be crowned the party's presidential nominee late Tuesday.

Yet Clinton sung her rival's praises to a powerful pro-Israel lobby, her clearest admission yet that the race was over.

"I know Senator Obama understands what is at stake here," Clinton said, seeking to shed the Illinois senator's perceived weaknesses among Jewish voters.

"Let me be very clear, I know that Senator Obama will be a good friend to Israel," Clinton said.

Obama also heaped praise on his rival for making "history" in her quest to be the first woman elected to the Oval Office as the two addressed the American Israel Public Affairs Council (AIPAC) within minutes of each other.

Obama told reporters after a visit to the US Senate that he had talked with Clinton, a senator from New York, early Wednesday.

"We are going to be having a conversation with the coming weeks," he said, adding he was confident the party would be unified by the November elections.

Clinton's campaign in the meantime pressed Obama to choose her as his vice-presidential pick.

Obama's giant-killing win over Clinton came at the climax of the longest, most expensive and spellbinding nominating epic ever.

On November 4, voters must pick between Obama, 46, a freshman senator and charismatic mixed-race standard-bearer of a new political generation, and Republican John McCain , 71, a wounded Vietnam war hero asking for one final call to service.

Obama plunged straight into the five-month election battle Wednesday, crossing swords with McCain over Middle East policy.

Laying out the contours of his presidential program, Obama insisted Jerusalem must remain the undivided capital of Israel, and said he would work to "eliminate" the threat posed by Iran.

"His appearance was very impressive. His words on Jerusalem were very moving," Israeli Prime Minister Ehud Olmert told reporters after meeting US President George W. Bush in the White House.

But less than two hours later, McCain's campaign was on the attack, denouncing Obama for presenting a "rather odd, alternative reality."

"Senator Obama really presents kind of a false choice today, that the only diplomacy that can work is with Iranian leaders," McCain's senior foreign policy adviser Randy Scheunemann told reporters.

"And Senator McCain has a very different view, that the kind of diplomacy we should pursue is with our allies."

Meanwhile, Obama's campaign announced that Caroline Kennedy, daughter of assassinated president John F. Kennedy (1961-1963), had been selected as part of a three-member team searching for a vice presidential pick.

Obama spokesman Bill Burton said in a statement that the team would also include former deputy attorney general Eric Holder and James Johnson, a senior Democratic Party insider.

"He will work closely with them in the coming weeks but ultimately this will be his decision and his alone," Burton said.

Clinton's campaign chairman, Terry McAuliffe, told MSNBC television that an Obama-Clinton ticket would be "unstoppable," adding: "I think we would have the White House for 16 years."

But Democratic political legend and former president Jimmy Carter warned against choosing Clinton, saying it would be Obama's "worst mistake," and "would just accumulate the negative aspects of both candidates."

Carter told British daily The Guardian that he favored "a person who can compensate for (Obama's) obvious potential defects, his youthfulness and his lack of long experience in military and international affairs."

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