Barack Obama introducing his secretary of state-designate Hillary Clinton last week. Left: Former president and potential liability Bill Clinton

A Defence secretary who has publicly and repeatedly scorned his 16-month Iraq withdrawal plan. A national security adviser who is a longtime buddy of his Republican nemesis. And a secretary of state who did everything short of take out a hit on him to scupper his chances of becoming the Democratic nominee. With friends like these at the top of president-elect Barack Obama's foreign policy team, who needs enemies overseas?

Had John McCain won the election, this is the sort of foreign policy team you would expect. Robert Gates, the Bush appointee who oversaw the US troop surge in Iraq that McCain championed and Obama opposed, as defence secretary. And General Jim Jones, a friend of McCain's since the Vietnam era, as national security adviser.

For a candidate who launched his campaign from a springboard of implacable opposition to the war in Iraq, appointing two veteran hawks with Republican Party associations might seem like a surprising opening gambit to a new era of foreign policy.

But the appointment of Hillary Clinton as secretary of state is regarded president-elect Barack Obama's most audacious move. "You've got to be kidding," neatly sums up the initial reaction in Washington from Republicans and Democrats alike.

Washington Democrats, even die-hard Clinton supporters, were stunned. That Obama owed her something was not disputed; the knife-fight-in-a-phone-box tactics employed during the primary season proved invaluable in a presidential race that was a bare-knuckle free-for-all. And she had, after an initially churlish concession, proven herself a team player by throwing her weight wholeheartedly behind the Obama campaign.

During the initial post-primary discussions between the two, Obama did not broach the position of secretary of state. Nor did Clinton raise it, directly or otherwise. The Democratic Party echo chamber that demanded she be named as Obama's running mate understood the old diplomatic rule applied when it came to the number-one foreign policy job; don't ask for what you haven't a snowball's chance in hell of receiving.

So when Obama invited Clinton to a meeting a week after his election victory, she still had no inkling that he was poised to offer her the most high-profile appointment outside of the presidency. There were rumours that education or commerce might be offered but Clinton's Plan B was to land the chair of a high-profile senate committee – foreign relations being the preferred choice – and then wait around for a vacancy on the Supreme Court.

It is understood discussions about Clinton's appointment were confined to Obama's close friends and advisers Valerie Jarrett and Peter Rouse, vice-president Joe Biden and chief of staff Rahm Emmanuel, a longtime friend of the Clintons. John Podesta, another Clinton loyalist who co-chairs Obama's transition team with Jarrett and Rouse, was also consulted.

Cut to the quick

Washington insiders say several of Obama's allies are cut to the quick, especially senator John Kerry, who had thrown his weight behind Obama from the outset and had lobbied furiously for the position. So too had Bill Richardson, a former Clinton cabinet member whose early endorsement of Obama was rewarded with the distinctly less glamorous post of commerce secretary. Paul Begala, a former Clinton strategist, summed it up thus: "During the campaign, you stab your enemies. During the transition, you stab your friends."

Obama's anti-war supporters are furious. Slamming Clinton's appointment, Peter LaVenia, co-chair of the Green Party, which endorsed Obama, told the Sunday Tribune: "The fact that not one senator or house member who voted against the war has been considered worthy to join his foreign policy team suggests that [Obama's] policies will continue the bellicose policies of previous administrations."

Aside from Clinton's support for the war in Iraq and her uneasy truce with Obama, there were other glaring obstacles to her appointment. There was the question of whether she had the necessary experience. After all, it was Obama who dismissed her foreign policy credentials as being limited to "drinking cups of tea with ambassadors' wives". And what about the claims of sniper fire in Bosnia? It's all very well to exaggerate the risks you took for world peace as a contender for the nomination. A secretary of state who is prone to embroidering the facts is quite another matter.

There were also reservations within the Obama camp about whether she could be trusted to subsume personal misgivings about his foreign policy agenda. Would she find the international stage an irresistible venue for a spot of freelancing? Which, for Obama's advisers, raised the most vexing question of all; what to do about Bill?

To the standard vetting question about whether there is anything in Clinton's personal or professional life that could embarrass the future president, the obvious two-word response would be 'my husband'.

The Clintons have always been magnets for controversy and scandal. For almost two decades, the US public has had ringside seats to their political and personal psychodramas.

Now they're going global, Clinton's skirt-chasing spouse poses far more of a potential headache for Obama than a secretary of state who harbours presidential ambitions of her own. (Memo to HRC: strongly discourage any spousal shopping trips with Carla Bruni while you and Nicholas Sarkozy wrestle with a summit-load of international crises.)

Addressing the issue, an Obama spokesperson said Clinton had agreed to a set of stringent new ground rules for his Global Initiative foundation – which has been widely praised for its efforts to combat a slew of global problems, from Aids in Africa to climate change – including full disclosure of the names of all donors, a ban on future contributions from foreign governments and an agreement to submit all future paid speeches and business activities for White House approval.

First international treaty

The agreement was reached after Clinton dispatched a team of six negotiators to hammer out an agreement with a delegation from Obama's transition team. But the potential for perceived conflicts of interest or expectations cannot be legislated against, notwithstanding the irony that the president-elect's first international treaty is with his secretary of state's spouse.

Given the hackles it has raised and the risks it entails, the obvious question is why Obama chose Hillary Clinton as his secretary of state. Clearly he wanted to placate her supporters. But there are other factors at play here, suggesting Obama is looking well beyond the 18 million cracks in Hillary Clinton's glass ceiling.

As well as delighting Clinton loyalists and helping to heal divides within the party, Clinton's appointment has placated the powerful Jewish-American lobby, which remains distrustful of the president-elect. Clinton's hawkish position on Iran and her strong pro-Israel credentials, as well has her husband's strenuous efforts to bring about peace in the Middle East, is reassuring to the powerful Jewish-American lobby at home and represents a short cut towards rebuilding the US reputation as an honest broker in the Israeli-Palestinian conflict.

Obama shares the Clinton view that US national security hinges to a significant degree on achieving some level of peace between Israel and Palestine.

And there are safety nets in place. By appointing his friend and adviser Susan Rice as UN ambassador, Obama has put a subtle brake on Clinton's power. Rice, who is fiercely loyal to Obama, is as forceful a personality as Clinton. As a former deputy secretary of state she has more direct diplomatic experience and knows her way around the department's labyrinthine structure and complex rivalries. Unlike previous UN ambassadors who have reported to the secretary of state, Rice will report directly to Obama.

All week, Obama's spokespeople have trotted out a standard line; "the president will set foreign policy and the parameters of the national security debate. His cabinet will enforce it." Their experience is invaluable: they know their way around Washington and will be equipped to hit the ground running. There is no time for rookie mistakes, and as long as Bill Clinton remains firmly behind the scenes, he is an invaluable asset, a deft guide through the minefield of foreign policy, who can help the new team avoid pratfalls and pitfalls on the global stage.

To Obama's supporters on the left, the appointments are conservative, a missed opportunity, a timid concession to the status quo but they have spiked the guns of his detractors on the right, who regard his appointments as bold and supremely confident choices.

And Clinton's is not the only appointment that suggests a degree of complex political calculus is at play. Democratic sources claim the selection of Arizona governor Janet Napolitano as secretary of homeland security was, in part, an olive branch to Obama's rival John McCain.

Napolitano was widely expected to challenge McCain for his Senate seat in 2010, threatening an ignominious end to his high-profile career; her appointment to Obama's cabinet has effectively neutered that threat and secured McCain's pledge to work on Obama's behalf towards unifying Congress. Meanwhile, he gets more kudos for placing another woman in a top cabinet position. Upon closer inspection, it seems Obama's bold choices are carefully calibrated checkmates.