Washington, Jan 15 (IANS) Describing the Mumbai terror attacks as a new challenge for American diplomacy, Hillary Clinton has vowed to build on economic and political partnership with India, "a nation with growing influence in the world", to deal with today's security threats.

"Today's security threats cannot be addressed in isolation," she told the Senate Foreign Relations Committee Tuesday during her confirmation hearing for the position of secretary of state under president-elect Barack Obama.

"Smart power requires reaching out to both friends and adversaries, to bolster old alliances and to forge new ones," she said. "That means strengthening the alliances that have stood the test of time-especially with our NATO partners and our allies in Asia.

Clinton completed her testimony Tuesday. The committee is expected to vote on her nomination Thursday and the full Senate is likely to approve her nomination before Obama takes office next Tuesday.

John Kerry, Democratic chairman of the committee, closed the hearing by saying "we are excited about the prospect of working with you."

"Our alliance with Japan is a cornerstone of American policy in Asia, essential to maintaining peace and prosperity in the Asia-Pacific region, and based on shared values and mutual interests," the former first lady said during her hearing.

The US "also has crucial economic and security partnerships with South Korea, Australia, and other friends in ASEAN."

"We will build on our economic and political partnership with India, the world's most populous democracy and a nation with growing influence in the world," Clinton said.

Noting that the world is now in the cross currents of the most severe global economic contraction since the Great Depression," she stressed the need to engage emerging powers like India and China to solve the crisis.

"For too long, we have merely talked about the need to engage emerging powers in global economic governance; the time to take action is upon us," Clinton said.

"We know that emerging markets like China, India, Brazil, South Africa, and Indonesia are feeling the effects of the current crisis. We all stand to benefit in both the short and long term if they are part of the solution, and become partners in maintaining global economic stability," she said.

Hillary Clinton said that she aims to "renew America's leadership" in a world that has undergone an "extraordinary transformation" since the end of the Cold War and is now facing "great peril."

Calling the current US engagement in Afghanistan the "greatest priority for the president-elect", she promised to use "diplomacy, development and defence" to work with allies in Afghanistan and Pakistan, which she referred to as "the central front in the war on terrorism."

President-elect Barack Obama will pursue a "more for more" strategy in Afghanistan, where additional US support will be supplemented by more NATO and Afghan government support, she said.

Clinton also emphasised the need to look at the problems in Pakistan and Afghanistan together, and said it is "imperative" to work with both of them to root out Al Qaeda, the Taliban, and other violent extremists.

"Terrorism remains a serious threat," Clinton said stressing the need for "a comprehensive strategy, leveraging intelligence, diplomacy, and military assets to defeat Al Qaeda and like-minded terrorists by rooting out their networks and drying up support for their violent and nihilistic extremism."

On Iraq, she called the withdrawal of US troops a "primary priority" and said it would occur within the context of the current Status of Forces Agreement.

The Obama administration hopes to remove US troops from Iraqi cities and villages by June 2009, and redeploy some of those troops to Afghanistan.

But as it focuses on Iraq, Pakistan and Afghanistan, US "must also actively pursue a strategy of smart power in the Middle East that addresses the security needs of Israel and the legitimate political and economic aspirations of the Palestinians," she said.

Hillary Clinton runs into rough weather over husband's fundraising

Washington, Jan 15 (IANS) Hillary Clinton has run into rough weather over potential conflicts of interest former President Bill Clinton's fundraising could pose if she is confirmed as secretary of state, but has refused to commit to greater disclosure.

Clinton asserted before the Senate Foreign Relations Committee Tuesday that government ethics officials have concluded under "well-established" rules that "there is not an inherent conflict of interest" for her in any of former president Bill Clinton's fundraising or other business dealings.

The former first lady stated at her confirmation hearing that her husband had already gone beyond what was legally required by signing a memorandum of understanding (MoU) to fully disclose donations to the Clinton Foundation.

Concerns about Bill Clinton's financial ties to foreign governments were expected to be the biggest hurdle in the New York senator's otherwise non-controversial nomination to be the country's top diplomat.

While admitting that extending the MoU to the Clinton Global Initiative is not required by law, Republican senator David Vitter asserted that "a lot of real and perceived conflict issues" arise from the work of the group, particularly relating to certain contributors from the Middle East.

Clinton responded that while the MoU would not be amended to cover the work of the Initiative, she was trying to address all questions about potential conflicts of interest in a "transparent manner" and there would be "ongoing reviews" of the Clinton Global Initiative's activities.

The initiative wasn't included in the original MoU because it has always disclosed the names of its donors, Clinton noted.

She also refused to agree to a request by Richard Lugar, the top Republican on the committee, to have the Clinton Foundation reject donations from foreign governments during her tenure as secretary of state.

She asserted that donor countries, as well as the Obama transition team, know that the majority of the money donated goes directly to humanitarian activities such as purchasing AIDS medications in poor countries.

Clinton also stated that all foreign government donations to the foundation will be reviewed by the State Department.

She said she is not immediately made aware of new donations to the foundation, so it would be tough to argue that she could be potentially influenced by its donors.

"I will keep a very close eye on how this is being implemented and make sure the good work of the foundation continues without having an untoward effect on my service," Clinton promised.

Lugar said he worried about the "perception problems" of having Clinton in the post as Bill Clinton continues his overseas fundraising for his foundation.

"I share the president-elect's view that the activities of the Clinton Foundation and President Clinton himself should not be a barrier to Senator Clinton's service," he said.

"But I also share the view, implicitly recognised by the Memorandum of Understanding, that the work of the Clinton Foundation is a unique complication that will have to be managed with great care and transparency."

The panel's chairman John Kerry concurred that Lugar's concerns about the foundation's donations were not partisan, but reflect the concerns of committee as a whole.

Still, in their opening statements, both Lugar and Kerry expressed support for Clinton's nomination. Lugar even called Clinton "the epitome of a big leaguer".

Although Clinton's daughter Chelsea was seated behind her, Bill Clinton watched the hearing from their Washington home.

The panel hopes to vote on Clinton's nomination Thursday.

IANS