Rice called Obama on Thursday morning, before sending him a letter officially withdrawing from consideration. Rice said she had concluded early this week that what she and Obama considered "unfair and misleading" charges against her over the Sept. 11 attack in Benghazi, Libya, would impede the president's second-term agenda.
"This was my decision," Rice said. When asked if Obama had tried to dissuade her, she said that he "understood that this was the right decision, and that I made it for the right reasons."
Her withdrawal leaves Senate Foreign Relations Committee Chairman John Kerry, D-Mass. with no apparent competitors to take over from Secretary of State Hillary Clinton. A senior administration official said that "something strange would have to happen" for Kerry not to be the choice.
The official also said that former senator Chuck Hagel, R-Neb., has emerged as a "solid" candidate to run the Pentagon, although a final decision has not been made. For the CIA, the official said, Obama is deciding between Acting Director Michael Morell and deputy national security adviser John Brennan, who has yet to tell the president whether he would accept the job.
As Obama assembles his second-term national security team, formal announcements are due as early as next week. National security adviser Thomas Donilon will remain in his job, according to officials.
Rice said that "after a long, grueling battle, in all likelihood, I would be confirmed." The assessment was shared by White House officials and by senior Democratic congressional aides who said they were confident that a majority of senators would have voted for her.
"But I really came to believe this would not be weeks, but potentially months, and incredibly distracting and disruptive," Rice said. The first few months of any president's second term, she said, are "your high-water mark of influence."
"If my nomination meant that the odds of getting comprehensive immigration reform passed or any other major priority were substantially reduced, I couldn't live with myself," she said.
But her removal from the scene is unlikely to quell the controversy that led to it: the extremist attack on the U.S. diplomatic mission in Libya that killed U.S. Ambassador Christopher Stevens and three other Americans.
Criticism led by Sens. John McCain, R-Ariz., and Lindsey Graham, R-S.C., has focused on what they called Rice's intentionally misleading description, in television interviews five days after the attack, of an anti-American demonstration that turned violent. The administration later revised that assessment, using what it said was updated intelligence information, to blame organized extremists.
Rice's withdrawal, Graham said, "will not end questions about what happened in Benghazi." Clinton is scheduled to appear before House and Senate committees next week to discuss an independent State Department review of possible security lapses that is nearing completion.
Rice and Obama made clear that she will continue at the United Nations. But administration officials said Obama left open a door when he spoke of her "limitless capability to serve our country now and in the years to come."
In the weeks before the Nov. 6 presidential election, as Republican criticism of Rice crystallized, the White House initially portrayed the fight over her as nakedly partisan. Congressional Republicans were unfairly attacking the ambassador simply because she represented the White House, administration spokesmen said.
GOP presidential candidate Mitt Romney also criticized the White House's handling of the attack, and suggested a cover-up.
But the controversy over Rice's portrayal of the attack did not evaporate after Obama won, and some congressional Democrats became worried about the cost of a nomination battle that probably would make negotiations over taxes and spending more difficult.
The White House insisted that Rice's television appearances had been closely coordinated with the intelligence community, and senior intelligence officials came forth with background statements supporting her.
But White House attempts to mollify critics and round up support by sending Rice to Capitol Hill for two days of meetings last month backfired when moderates such as Sen. Susan Collins, R-Maine, declined to endorse her.
Collins's criticism was a red flag for the administration. Along with new Republican charges this week that Rice had mishandled diplomatic tasks when she served as the Bill Clinton administration's chief diplomat on Africa, Rice and the White House began to believe that the cause was lost.
The Africa charges, a senior administration official said, "indicated that they were going to keep going -- once they ran out of one issue, they would manufacture another."
By last Sunday, Rice said, "I started very seriously thinking that the costs really outweighed the benefits. That no number of facts or rationality or reason was going to deter those who were determined to make this a political issue."
Throughout the controversy, Kerry has said little about Rice. On Thursday, he called her "an extraordinarily capable and dedicated public servant."
Rice, 48, was an early Obama backer among Democratic national security experts who had worked in the Clinton White House, where she served on the National Security Council staff. During the 2008 campaign, Hillary Clinton's team considered Rice's support for Obama a defection.
After Obama won, he gave Rice the U.N. job, a plum among policy wonks but a post that is not well known nationally. There, she quickly became a White House insider with strong connections among Obama's close circle of policy advisers. Rice has worked alongside Hillary Clinton without any public hint of discord, although the two were never close.
Clinton called Rice an "indispensable partner," and said they had worked together on difficult issues such as Iran, North Korea, Libya and South Sudan. "Susan has worked tirelessly to advance our nation's interests and values," Clinton said. "I am confident that she will continue to represent the United States with strength and skill."
Rice said she does not think the secretary of state battle will undermine her effectiveness at the United Nations. "They know, because they've seen it firsthand, that I have the full confidence of the president," she said.
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