The transition aide told The Associated Press that the two camps have worked out financial disclosure issues involving Clinton's husband, former President Bill Clinton, and the complicated international funding of his foundation that operates in 27 countries. The aide said Obama and Hillary Clinton have had substantive conversations about the secretary of state job. The aide spoke on condition of anonymity because Obama is not prepared to make his decision official.
Clinton has been mulling the post for several days, but the transition aide's comments suggested that Obama's team does not feel she is inclined to turn it down.
Some Democrats and government insiders have questioned whether Clinton is too independent and politically ambitious to be an effective secretary of state. But Obama is said to admire her talents and experience, as do many other Democrats.
A senior adviser to Obama said the president-elect believes Clinton would bring instant stature and credibility to U.S. diplomatic relations and that the advantages to her serving far outweighed potential downsides.
Clinton would have to surrender her New York Senate seat, which she has held for eight years, to take the job.
Clinton spokesman Philippe Reines would not comment Thursday night, except to say that anything about Cabinet appointments is for Obama's transition team to address.
The president-elect also is likely to choose Arizona Gov. Janet Napolitano to be secretary of homeland security, top Obama advisers and several Democrats said Thursday as the shape of Obama's Cabinet begins to emerge.
The Obama advisers cautioned that no final decision has been made on putting Napolitano in charge of the Homeland Security Department, the massive agency created by Congress after the Sept. 11, 2001, terrorist attacks. But the advisers said she was easily the top contender.
Thus far, Obama has informally selected Washington lawyer Eric Holder as attorney general and former Senate Majority Leader Tom Daschle as health secretary. The plans could be sidetracked by unexpected glitches in the final vetting process, officials note.
Among other Cabinet posts: Senior Democrats say there is a strong possibility that Defense Secretary Robert Gates would stay temporarily and later give way to former Navy Secretary Richard Danzig. Even so, Republican Sen. Chuck Hagel of Nebraska and Democratic Sen. Jack Reed of Rhode Island also are said to be under consideration.
Democrats also say that several people remain in the running for treasury secretary, including Timothy Geithner, president of Federal Reserve Bank of New York; Lawrence Summers, former treasury secretary and one-time Harvard University president; and former Federal Reserve Chairman Paul Volcker.
Several news organizations reported Thursday that Chicago businesswoman Penny Pritzker, who was Obama's national campaign finance chairman, was his leading choice to become commerce secretary. However, Pritzker issued a statement Thursday saying she is not a contender for the post.
Officials say Laura D'Andrea Tyson, the former chair of White House Council of Economic Advisers in the Clinton administration, is in the running for the Commerce job.
The Obama advisers and Democrats discussed the Cabinet positions only on grounds of anonymity because of the private nature of the screening process.
Obama appears to be assembling a team that includes a mix of longtime aides, Washington insiders and a sprinkling of Democratic governors. Besides Napolitano, strong contenders for Cabinet posts include New Mexico Gov. Bill Richardson and Kansas Gov. Kathleen Sebelius.
Sebelius and Napolitano, who once was Arizona's attorney general, were among the first governors to commit to Obama's candidacy. Richardson endorsed Obama after ending his own presidential bid, angering the Clintons.
As governor, Napolitano has fought to curb illegal immigration, but she has been skeptical that building a fence along the border will solve the problem. She once said, "You build a 50-foot wall, somebody will find a 51-foot ladder."
Last year, her state passed a law that requires all Arizona businesses to use the federal online database, E-Verify, to confirm that new hires have valid Social Security numbers and are eligible for employment. This has been a cornerstone of the Bush administration's immigration policy.
As governor, she has overseen wildfires and severe flooding and worked with the Federal Emergency Management Agency, now part of the Homeland Security Department.
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Associated Press writers Beth Fouhy in Chicago and Liz Sidoti, Eileen Sullivan, Jim Kuhnhenn and David Espo in Washington contributed to this report.
