From NBC's Libby Leist
In a conference call with reporters this afternoon, Israeli Prime Minister Olmert's spokesman Mark Regev said that the conflict in Gaza "could get worse before it gets better..." as Israel continues striking Hamas targets.

Regev said the Israeli goal is "to try to neutralize the threat Hamas poses" and create "a new reality on the ground, a new security environment" where civilians in southern Israel are not threatened by rocket attacks. He said Israel does not seek to re-occupy Gaza.

"We are acting defensively to protect our people. That's our goal," he said.

Regev told reporters the Israelis believe their military strikes "started off very effectively" and caught Hamas by surprise.

He insisted the Israeli military was seeking to avoid civilian casualties and that Israeli is allowing sufficient humanitarian aid to enter.

Regev denied that the political calendar in Israel -- which holds elections on Feb. 10 -- was a factor in the current military operation.

"We are responding to their aggression," he said.

The Israeli government has been working with the Bush administration throughout the weekend, Regev said, and he expressed support for the Obama team position that there is only one president at a time.

From NBC's Domenico Montanaro and Carrie Dann
The Middle East crisis has inserted briefings and high-stakes phone conferences into Obama's otherwise tropical -- and apolitical, notes the Politico's Ben Smith -- vacation destination in Hawaii. But the president-elect continues to occasionally bristle at the constant presence of the "protective pool" within distant eyeshot of his family's comings and goings; over the weekend, he even left the press behind entirely on a visit to a local water park. 

Reporters on the trail with Obama during his campaign long complained of a lack of access, or a standoffishness from Obama, but the president-elect has never exactly been a fan of the press. He wrote about how he believes the press tends to be fickle and not focus on what the American people care about -- something he has reminded the press of while on the trail.

More than just what Obama thinks of the press, 60 Minutes reminded us last night of the president-elect's cringing at his loss of anonymity. Despite saying it's not a "complaint" and that it's what he signed up for, Obama's attempts to escape the press may become an enduring part of the 44th President's legacy.

From NBC's Libby Leist
Secretary of State Condoleezza Rice has spoken to 12 foreign officials about the crisis in Gaza since Friday and has briefed President-elect Obama regularly, the State Department said today. The Bush Administration has refused to call for an immediate end to the violence as other nations have. Instead, State Department spokesman Gordon Duguid told reporters the U.S. holds Hamas responsible "for their policies of confrontation" and called on the rockets into Israel to stop.

"The U.S. is working for a ceasefire that will be fully respected. That means the ceasefire must be durable and sustainable," Duguid said.

Rice's calls since Friday include Israeli Prime Minister Olmert, Israeli Defense Minister Ehud Barak, UN Secretary General Ban, and five calls to Israeli Foreign Minister Livni.

Duguid also said that the U.S. is "urgently assessing" the humanitarian situation in Gaza through its NGO partnerships. The U.S. does not have any presence in Gaza.

Obama is most admired man; Clinton most admired woman; Palin knocks off Oprah

From NBC's Domenico Montanaro
President-elect Obama was chosen as the most admired man in America. Some would find this not surprising, but USA Today notes that it's "the first time a president-elect has topped the annual survey in more than a half-century. President Bush falls to a distant second after seven years as the most-admired man."

Hillary Clinton was once again the most admired woman, and has held that honor for 13 of the last 16 years. But there's another woman moving up the list -- Alaska Gov. Sarah Palin. Palin came in second, knocking off Obama-backing mogul talk show host Oprah Winfrey. Secretary of State Condoleezza Rice was fourth, and Michelle Obama rounded out the top five.

Among the men, Sen. John McCain, the Republican standard bearer in 2008, finished third -- ahead of Pope Benedict XVI, the Rev. Billy Graham and former President Bill Clinton, all of whom tied for fourth.

From NBC's Savannah Guthrie
HAWAII -- President-elect Obama and his team deferred on the situation in the Middle East over the weekend, but said he would confer with National Security Adviser-designee Gen. James Jones and Secretary of State-designate Hillary Clinton.

Here's the statement:

"President-elect Obama continues to closely monitor global events, including the situation in Gaza," a transition official said. "He had an intelligence briefing today and plans to talk with General Jones and Senator Clinton this evening. We appreciate the information being shared by the Administration.  There is one president at a time, and our work now is focused on being ready to hit the ground running on January 20th."

*** UPDATE *** White House places blame squarely on Hamas
NBC's Patty Culhane adds that National Security Council Spokesman Gordon Johndroe released the following statement: 

"In order for the violence to stop, Hamas must stop firing rockets into Israel and agree to respect a sustainable and durable ceasefire. That is the objective to which all parties need to be working. That is what the United States is working towards."

*** UPDATE 2 *** Here's this morning's statement from Senate Majority Leader Harry Reid, who says that he "strongly support[s]" Israel's "right" to retaliate against Hamas:

"I continue to closely monitor events in Gaza. I strongly support Israel's right to defend its citizens against rocket and mortar attacks from Hamas-controlled Gaza, which have killed and injured Israeli citizens, and to restore security to its residents. Hamas' failure to stop these attacks only exacerbates the humanitarian situation for the residents of Gaza and undermines efforts to attain peace and security in the region."

*** UPDATE 3 *** NBC's Carrie Dann adds a wrap on the latest in the violence:
Violence -- defined as "all-out war" by Israeli Defense Minister Ehud Barak -- continues in the Gaza Strip today as the Israeli military intensifies its efforts to weaken Hamas. The Bush administration has squarely placed the blame for the retaliatory air strikes on Hamas, which has rained rockets into Israeli territory. Palestinian casualties are estimated at more than 300.     
 
Obama has remained cautious about inserting himself into the politics of the clash, speaking only through spokespersons and repeating the mantra that "there is one president at a time."
 
Politico points out that the Gaza strikes mean a tough path ahead for the president-elect, whose foreign policy team includes advisors with slightly divergent views on the best way to work towards Middle East peace.

"Within Obama's transition, Democrats say there's a subtle division between advisers who hold out hope for a directly negotiated peace, culminating with a signing ceremony on the South Lawn, and those who have argued for a more oblique approach aimed at a negotiated peace between Israel and Syria, and weakening Syria's ties with Iran. The latter group of advisers -- which include former Clinton aides Dennis Ross and Martin Indyk -- see weakening the role of Iran, which is closely tied to Hezbollah, as central to establishing an Israeli-Palestinian peace."

From NBC's Lauren Appelbaum
After returning from Iraq, Afghanistan and Germany this afternoon, Gov. David A. Paterson (D-NY) held a media availability with two New York congressmen, Representatives Steve Israel and Anthony Weiner. Reporters peppered them with questions concerning the replacement of Sen. Hillary Clinton's seat in the United States Senate.
 
"Whatever people say, whatever people want to infer, whatever people choose to think, that decision is one that I'm taking very seriously, because I'm being asked to substitute for the public, which will give its final verdict two years later," Paterson said at LaGuardia Airport, Marine Air Terminal in Flushing. "And I assure you, no person will influence me, coerce me, or in any way cause me to do anything other than what is my best judgment."
 
When asked about Caroline Kennedy, Paterson knocked down the idea she is the front-runner but said little more in specifics about her. He stressed he would not be announcing his appointment until Clinton is confirmed as Secretary of State.
 
Paterson called fellow traveler Israel "highly qualified" for the position. The two had met in the governor's office on Friday, Dec. 12th to discuss Israel's interest in the seat. But Paterson explained they wanted to avoid upsetting anyone because they were spending so much time together during this trip. He said they had no intention of discussing the seat during the trip but did discuss newspaper articles, which included quotes "sounding more like the prelude to a high school prom than the choosing of a United States Senator."
 
"We found it rather amusing," Paterson said, "but we were much more engrossed with the plight of our troops in Afghanistan and in Iraq and the prospect of peace in those regions."
 
When reporters asked Israel why he wants the appointment, the congressman focused on his current obligation as a member of the House of Representatives, which he said he was doing during this trip.

"I'm sure that the governor will make the best decision for the people of the state of New York," Israel said.
 
Weiner declined to answer any questions pertaining to this topic.

"This is a decision for the governor to make and the governor alone, and he'll have to make those judgments," the congressman said. "I want to be the only member of the congressional delegation not commenting on this for a while."
 
The three officials also stressed Iraq's situation has improved, but Afghanistan's situation has worsened. Paterson said he was "quite amazed" at Iraq's progress and credited the Iraqi people for choosing democracy over an Al Qaeda-led government. Regarding Afghanistan, however, Paterson said the situation was "deteriorating" due to greater border conflicts and the Taliban.
 
"Iraq is as good as it's going to get; I've never seen it better than I saw it in the past two days," added Israel, who has been to the region six times. "But I have never seen Afghanistan more challenging than I have seen it. It has deteriorated badly."

From NBC's John Yang
President Bush and his administration -- well, most of his administration other than Defense Secretary Robert Gates -- will be moving on in a few weeks, but Mr. Bush is still exercising his power of appointment.

On Christmas Eve, he handed out gifts to 24 people -- seats on a variety of government advisory boards, many of them largely ceremonial positions that don't require congressional approval.

A few of the lucky recipients of some last-minute presidential stocking stuffers:

Longtime Republican Party official Maria Cino and Commerce Department official Israel Hernandez both got four-year seats on the Advisory Committee for Trade Policy and Negotiations.

For Barry Jackson, a top White House political advisor who previously was an aide to Karl Rove and House Republican Leader John Boehner, there's a six year term on the Board of Trustees of the Woodrow Wilson International Center for Scholars.

Anita McBride, Laura Bush's chief of staff, will serve on the National Capital Planning Commission through Sept. 22, 2011.

And Secretary of State Condoleezza Rice and Amb. Nancy Goodman Brinker, the chief of protocol, will join the Board of Trustees of the John F. Kennedy Center for the Performing Arts.

From NBC's Mark Murray and Lauren Appelbaum
Perhaps the most intriguing detail in the Obama team's Blagojevich report is this passage regarding Valerie Jarrett's conversation with Illinois SEIU official Tom Balanoff, in which Balanoff raised the question of Blagojevich possibly being Obama's HHS secretary.

"Ms. Jarrett recalls that Mr. Balanoff also told her that the Governor had raised with him the question of whether the Governor might be considered as a possible candidate to head up the Department of Health and Human Services in the new administration. Mr. Balanoff told Ms. Jarrett that he told the Governor that it would never happen. Jarrett concurred."

The report adds, "Mr. Balanoff did not suggest that the Governor, in talking about HHS, was linking a position for himself in the Obama cabinet to the selection of the President-Elect's successor in the Senate, and Ms. Jarrett did not understand the conversation to suggest that the Governor wanted the cabinet seat as a quid pro quo."

Asked in the conference call about Balanoff raising this Blago-for-HHS idea, incoming White House counsel Greg Craig responded that Jarrett "thought it was ridiculous for the governor of Illinois to be talking about being appointed to Barack Obama's cabinet, at a time when he was under investigation ... for a variety of problems."

From NBC's Chuck Todd
Regarding the interviews that Obama, Jarrett, and Emanuel had with prosecutors, all three were accompanied by private counsel. For Obama, Bob Bauer was the attorney present; for Jarrett, it was Chicago attorney Vince Connelly; and for Emanuel, he brought DC power attorney Neil Eggelston.

Also, Patrick Fitzgerald was not personally present during the three interviews. Instead, they were conducted by assistant U.S. attorneys and FBI investigators.

During Emanuel's interview, the investigators did play back recordings of his conversations with Blagojevich and Harris in order to help refresh Rahm's memory.

Some other extraneous facts folks may want to have:
-- the Dr. Eric Whitaker who is cited in this report is currently on vacation with the Obamas in Hawaii...

-- The SEIU official Jarrett spoke with, Tom Balanoff, had a speaking role at the Democratic convention in August 2008...

-- Per the report, Emanuel had one or two phone calls with Blagojevich about Obama's Senate seat, as well as about four phone calls with Harris. If true, that's fewer than the number of contacts that Chicago Sun-Times columnist Michael Sneed reported last week -- 21

"Sneed hears rumbles President-elect Barack Obama's chief of staff, Rahm Emanuel, is reportedly on 21 different taped conversations by the feds -- dealing with his boss' vacant Senate seat!  A lot of chit-chat? Hot air? Or trouble? To date: Rahm's been mum. Stay tuned."

From NBC's Mark Murray and Chuck Todd
While making clear that Obama and his team had no inappropriate contact regarding the vacant Senate seat, the report does note Obama's preferences to succeed him.

After Valerie Jarrett withdrew her name from consideration for the Senate seat, the report says, Obama discussed other "qualified" candidates with incoming chief of staff Rahm Emanuel and senior adviser David Axelrod. They were Rep. Jan Schakowsky, Rep. Jesse Jackson Jr., state comptroller Dan Hynes, and Tammy Duckworth, director of the state's department of veterans' affairs.

Emanuel then relayed those names to Blagojevich's chief of staff, John Harris. The report says in subsequent phone calls, Emanuel -- with Obama's approval -- recommended state Attorney General Lisa Madigan and Chicago Urban League President Cheryle Jackson as "qualified candidates" to Harris.

One passage that raised our eyebrows here: "In these conversations, Mr. Emanuel and Mr. Harris discussed the merits of potential candidates and the strategic benefit that each candidate would bring to the Senate seat." What does Greg Craig mean in his report by "strategic benefit"?

From NBC's Mark Murray and Chuck Todd
Perhaps the most interesting news from the Blagojevich report just released by Obama's transition office is that Obama -- as well as Rahm Emanuel and Valerie Jarrett -- had interviews in the past week with US attorney Patrick Fitzgerald's office. We later learned that Obama was accompanied by his personal attorney, Bob Bauer.

This seems to explain why the Obama team waited until this week to release its report, and why Fitzgerald wanted them to wait.

Here's the key passage from the report: "These accounts were communicated to the Office of the United States Attorney in interviews that were conducted last week. At the request of the Office, we delayed the release of this report until such time as the interviews could be completed. The interviews took place over a period of three days: Thursday, December 18, 2008 (the President-Elect); December 19, 2008 (Valerie Jarrett); and December 20, 2008 (Rahm Emanuel)."

The rest of the report confirms what had been leaked in previous days: that incoming chief of staff Rahm Emanuel had one or two conversations about the Senate seat with Blagojevich; that Emanuel had about four conversations about the seat with Blagojevich chief of staff John Harris; and that in these conversations, there was never a discussion about any quid-pro-quo for the seat.

"The accounts support your statement on December 11, 2008 that you 'have never spoken to the Governor on this subject [or] about these issues,' and that you 'had no contact with the Governor's office,'" incoming White House counsel Greg Craig outlines to Obama in the report. "In addition, the accounts contain no indication of inappropriate discussions with the Governor or anyone from his office about a 'deal' or a quid pro quo arrangement in which he would receive a personal benefit in return for any specific appointment to fill the vacancy."

Click here for the entire report.

From NBC's Kristin Wilson
President-elect Barack Obama will use the same Bible that Abraham Lincoln used at his inauguration when he takes the oath of office this January.

Obama will be the first president since Lincoln to use the Bible, which was given to the Library of Congress by the widow of Robert Todd Lincoln in 1928. Robert Todd Lincoln was the only child of Abraham and Mary Todd Lincoln who survived to adulthood.

The burgundy velvet Bible with gilded edges was purchased and inscribed by William Thomas Carroll, clerk of the Supreme Court, with these words:

"I, William Thomas Carroll, clerk of the said court do hereby certify that the preceding copy of the Holy Bible is that upon which the Honble. R. B. Taney, Chief Justice of the said Court, administered to His Excellency, Abraham Lincoln, the oath of office as President of the United States …"

According to Clark Evans, Senior Reference Librarian for the Rare Book and Special Collections Division at the Library of Congress, an armed escort will accompany the book during its time away from the Library. He also said that special arrangements are being worked out to protect the Bible should the weather during the inauguration ceremony become threatening.

For those who wonder why we have to inaugurate the new president during the coldest part of the year, blame the Constitution. With the ratification of the 20th Amendment, the date was moved back from March 4th to January 20th in 1937. FDR was the first president to take the oath of office in January.

Following the oath and "Hail to the Chief" comes a 21-gun salute provided by Howitzers of the Presidential Salute Battery, 3rd United States Infantry Regiment, also known as The Old Guard.

Why 21? Add up the numbers in the year of America's independence: 1+7+7+6 = 21.

From NBC's Domenico Montanaro
On a day when it was revealed the gross domestic product shrank 0.5% in the third quarter and home sales plunged 8.6%, Vice President-elect Biden promised no earmarks on a potential stimulus package.

"I know it's Christmas, but the package will not become a Christmas Tree," he said, per the pool producer at an event where Biden met with several economic advisers in Washington.

At the table with Biden: Jason Furman, Jeanne Lambrew, Carol Browner, Larry Summers, Melody Barnes, Phil Schiliro and Jared Bernstein.

Biden took two other questions, including one on the economy and one on embattled Illinois Gov. Rod Blagojevich. 

Biden added that the transition's economic team is getting close to an agreement with congressional leaders on the stimulus package, particularly on the scope of the investment, which has been reported to be in the neighborhood of a staggering $850 billion.

Biden was asked if the internal review the Obama transition team is promising to release later today will exonerate the transition team. He said he doesn't think exonerate is the right word, but it will show there was no inappropriate contact with Obama or his staff, per the pool producer.

*** UPDATE *** NBC's Lauren Appelbaum has the exact wording on the "exonerate" question:
Q: Sir, will the Blagojevich report exonerate the transition team?
A: I don't think there's anything to exonerate. There's-- ah --it's been clear that the President-elect has had no contact with Blagojevich and/or anyone on his team that he's asserted, and you'll soon find out in the release today that there has been no inappropriate contact by any member of the Obama staff or the transition team with Blagojevich, and I think the report you'll see will reflect that this afternoon.

From NBC's John Yang
President Bush heads to the presidential retreat Camp David for his last Christmas this afternoon. It will be the 12th Christmas he's spent there -- four when his father was president and eight during his own presidency.
 
The Bushes have chosen to spend both their Thanksgivings and Christmases at Camp David in order to give the White House Residence staff those days off. Camp David, on the other hand, is a military facility and is staffed 24/7.
 
It will be a family Christmas. The guest list includes the president's parents, Mrs. Bush's mother, their twin daughters, Barbara and Jenna Bush Hager, their new son-in-law, Henry Hager, and the Mr. Bush's siblings and their families.
 
The day after, the Bushes will head to their Prairie Chapel Ranch outside Crawford, Texas, where they'll stay until early January.

From NBC's Carrie Dann, Mark Murray, and Domenico Montanaro
The holiday week may have visions of sugarplums filling many people's minds, but it's still rejected absentee votes and challenged ballot count spreadsheets dancing in the heads of Minnesota's politicos. Here's a quick briefing on where things stand in the recount that hits the seven-weeks-past-Election-Day mark tomorrow:

Q: Who is ahead?
A: As of Friday afternoon, the Minneapolis Star-Tribune count gives Franken a 251-vote advantage going into tomorrow's meeting of the state canvassing board to review challenged ballots withdrawn by both candidates during the recount.  Franken's team predicts that, coming out of that meeting, they will still hold a lead of 35-50 votes.  That number is based on their internal count of withdrawn challenges, which are in the process of being reallocated into the respective piles of the candidate for whom each ballot was originally cast.  The Coleman team did not comment today on how they expect tomorrow's count to shake out, but they are reserving hope that two outstanding disputes -- over ballots that may have been counted twice and over mistakenly rejected absentee ballots -- will be resolved in their favor to give them the upper hand. 

Q: How many ballots are left to count?
A: After tomorrow's meeting of the state canvassing board, assuming that no unplanned disputes arise over the spreadsheet of reallocated withdrawn challenged ballots, every ballot cast on election day will have been counted.  But there are still an additional 1,600 mistakenly rejected absentee ballots that have not been included, and the Minnesota Supreme Court set December 31 as the deadline for all parties to jointly determine how to count these absentee ballots. (There is some doubt that the Coleman and Franken camps will be able to come together on this, although both sides have publicly pledged to honor the court's order that they act "in good faith" on the shared agreement; if they don't, they could be subject to sanctions, though it remains unclear exactly what those sanctions would be.) 

Q: So what happens tomorrow?
A: Two things:  One, the state canvassing board reviews a spreadsheet of reallocated withdrawn ballot challenges and -- hopefully -- releases a final tally of the counted votes. That's the number that the Franken campaign expects to see +35-50 votes in their favor.  Also tomorrow, the state's Supreme Court meets to consider the issue of about 100 votes that the Coleman team believes were accidentally counted twice.

Q: When is the election certified? Who certifies?
A: We have an easy answer to the second question: The state canvassing board certifies. But we don't have an answer to the first of when the election is certified. "It's up in the air," the secretary of state's office tells NBC News. The earliest possible date? If there are no further lawsuits or disputes, the count could technically be final by December 31st, the deadline by which both campaigns must agree on how to handle the accidentally rejected absentee ballots. 

Q: How likely is that?
A: Keep in mind that the back-and-forth in Minnesota has now gone on over a week longer than the Florida recount, which concluded on December 13, 2000. 

Bottom line: don't nix your New Years' Eve party plans to watch the news, just yet.

From NBC's Savannah Guthrie
HAWAII -- The Obama report on the Blagojevich disclosures is not being released today, according to multiple sources. 

It is expected to be released tomorrow.

From NBC's John Yang
Come Jan. 20, President Bush likes to say, he'll go from 100 miles an hour to five. And now he and First Lady Laura Bush are equipped for that slower pace.
 
The president's senior staff gave the Bushes matching Texas-crafted rocking chairs, one made from an oak tree from their Prairie Chapel Ranch outside Crawford, Texas, the other from a Scarlet Oak -- planted by President Benjamin Harrison in 1892 -- that fell on the White House North Lawn last December.
 
The presentation was made Friday night at a dinner for Mr. Bush's current and former Cabinet and staff in the East Room of the White House. Nearly 200 attended, including former communications director Dan Bartlett, former press secretary Ari Fleischer, former counsels Alberto Gonzales and Harriet Miers, and former political adviser Karl Rove.

From NBC's Jim Miklaszewski and Courtney Kube
Secretary of Defense Robert Gates has signed a deployment order to send a combat aviation brigade, about 3,000 troops, to Afghanistan in early 2009.

The brigade, from the 82nd Airborne, will fulfill one of the critical deficits for U.S. forces in that country right now -- helicopters. 

Last week, Gates said he expects to have three more brigade combat teams in Afghanistan by "summertime." A senior defense official said that the combat aviation brigade is not among those brigades mentioned by the secretary (one brigade, the 3rd Brigade, 10th Mountain Division, deploys there in January).

So, with the addition of this aviation brigade, the three BCTs Gates spoke about last week, and the logistics forces needed to support all of these new troops, the U.S. now plans to send between 21,000 and 25,000 new troops to Afghanistan in 2009.

That nearly doubles the number of U.S. boots on the ground there now, which stands at 31,000.

From NBC's Carrie Dann
The seemingly endless Minnesota recount, which could well be headed for a legal limbo that would drag into the New Year, has lawyers and reporters digging for answers about what, if anything, Senate Democrats could do to intervene in the contest between Al Franken and Norm Coleman.

It turns out that there IS an example of a time when the United States Senate attempted to weigh in on a contested Senate race -- the closest one in history, in fact. 

The bad news?  The result was a Capitol Hill debacle.  
 
When the dust settled on election night in New Hampshire in 1974, Republican Louis Wyman led by 355 votes. But a recount immediately after the election flipped that result into a 10 vote advantage for Democrat John Durkin. But a SECOND recount put Wyman back on top again, by a mere two votes, so Durkin's certification as the winner was negated by the governor and awarded to Wyman instead. 

Durkin took his case to the Senate, where Democrats held a 60-vote majority.  The case got gummed up in the Rules Committee, then in the full Senate, which kicked it back to Rules and then back AGAIN to the Senate, until the statesmen threw up their hands and called for a new election. (The New Hampshire governor appointed a temporary replacement for the intervening six weeks.)  Durkin won the repeat election by 27,000 votes.
 
The Wyman/Durkin race is the only instance in which the Senate directly engaged in trying to determine the outcome of an undecided election.  But there are a number of other instances in which the Senate played a role in the seating of an elected or appointed member. In 1947, it refused to seat Mississippi senator Theodore Bilbo, who was suspected of bribery and voter intimidation.  Bilbo's swearing-in was delayed while an investigation was launched, and Bilbo died before it was ever complete.
 
After the 1918 election, the Senate provisionally seated Michigander Truman Newberry despite a controversy swirling around alleged campaign finance violations.  Newberry was convicted, but his conviction was overturned by the Supreme Court.  By a narrow vote, the Senate decided that Newberry had been lawfully elected to the seat, but it "severely condemned" him for allowing excessive funds to be spent on his campaign.  Newberry resigned under a cloud of controversy in 1922.
 
Fun fact?  Click here to find out who Newberry narrowly defeated to win the 1918 race. (Hint: it's a man whose last name that's still in headlines to this very day.) 

From NBC's Abigail Williams and Domenico Montanaro
In his first significant press conference since the allegations of corruption made last week Illinois Gov. Rod Blagojevich not only ignored requests for his resignation, but declared his innocence on all accounts. 

"I'm here to tell you right off the bat that I am not guilty of any criminal wrongdoing, that I intend to stay on the job, and I will fight this thing every step of the way," Blagojevich said. "I will fight. I will fight. I will fight until I take my last breath.

He continued: "I have done nothing wrong, and I'm not going to quit a job the people hired me to do because of false accusations and a political lynch mob. Now, that's what I'm going to do. Let me tell you what I'm not going to do. I'm not going to do what my accusers and political enemies have been doing, and that is talk about this case in 30-second sound bites on 'Meet the Press' or on the TV news."

Blagojevich reiterated that he's "dying to answer these charges" -- as he did yesterday before his run.  "I am dying to show you how innocent I am."

He almost dared, taunted the prosecution to present its evidence and show the goods, so to speak.

"I want to assure everyone who's here, and everyone who's listening, that I intend to answer every allegation that comes my way," he said.

Blagojevich went on to ask the public to withhold further judgment until he had been given his day in court and vowed he would be "vindicated." He then launched into a reading of the first several lines of the poem "If," Rudyard Kipling's advice emphasizing dignity and virtue.

"If you can keep your head when all about you are losing theirs and blaming it on you; if you can trust yourself when all men doubt you and make allowance for their doubting, too; if you can wait and not be tired by waiting; or being lied about, don't deal in lies; or being hated, don't give way to hating."

Blagojevich then went on to lament the "powerful forces arrayed against me. It's kind of lonely right now. But I have on my side the most powerful ally there is, and it's the truth."

Truth, otherwise defined as… "And besides, I have the personal knowledge that I have not done anything wrong."

He continued, "To the people of Illinois, I ask that they wait and be patient, sit back and take a deep breath, and please reserve judgment. Afford me the same rights that you and your children have. The presumption of innocence. The right to defend yourself. The right to your day in court. The same rights that you would expect for yourselves. And one last thing: To all of those -- to those of you who have expressed your support to Patti and me during this difficult time, I'd like to thank you for your thoughts; I'd like to thank you for your prayers; and I'd like to thank you for your good wishes. Patti and I cannot express to you how grateful we are for your kindness."

And he left the press corps and viewers with: "Merry Christmas. Happy holidays."

Merry Christmas, indeed.

From NBC's Athena Jones
CHICAGO -- It's a wrap.

With the announcement of California Rep. Hilda Solis of California as his pick for Labor secretary, former Dallas Mayor Ron Kirk for U.S. Trade Representative and retiring Illinois Rep. Ray LaHood for Transportation secretary, Obama completed his Cabinet today, doing so sooner than any incoming president since Richard Nixon.

Obama also tapped Karen Mills to be administrator of the Small Business Administration, and he stressed that he had assembled a team quickly to deal with the massive economic challenges facing the country.

"With these outstanding appointees, I have filled out our economic team and done so at an earlier point than any president in history because we face challenges unlike any we have faced in generation," he said. "Daunting as the challenges we are inheriting may be, I'm convinced that our team and the American people are prepared to meet them. It will take longer than any of us would like -- years, not months. It will get worse before it gets better. But it will get better if we are willing to act boldly and swiftly, and that is what we will do when I am president of the United States."

The president-elect has repeatedly sought to manage the public's expectations by warning that the road to an economic recovery would be long, while at the same time expressing confidence that the economy would recover and begin to grow again.

Obama refused to say how large the economic recovery plan that he hopes to push through Congress would need to be. But he said it would cost a "significant amount of money on the front end." Obama says the plan will focus on job creation, increasing demand, and fixing financial markets to get the economy back on track. Some estimates have put the amount of stimulus that could be needed at up to $1 trillion.

"I'm not going to give you a number because we're still making these evaluation," he said. "But you are exactly right that what we've seen, in terms of the evaluation of economists from across the political spectrum, is that we're going to have to be bold when it comes to our economic recovery package."

Solis is the third Hispanic to join the Cabinet, Kirk is the fourth black member, and LaHood is the second Republican. Obama called Solis an advocate for working families; said Kirk understood the promise of trade and its pitfalls; and noted that LaHood's appointment reflected a "bipartisan spirit" that the country needed to reclaim.

The appointment of Solis -- a union favorite who has been an opponent of free trade agreements -- and Kirk -- who was a NAFTA booster as mayor -- seemed to present a conflict. Obama made a point of saying there was "nothing inconsistent about standing up for free trade and standing up for American workers."

"As a leader, negotiator, and principled proponent of trade, Ron will help make sure that any agreement I sign as president protects the rights of all workers, promotes the interests of all Americans, strengthens American businesses, and preserves the planet we all share," he said.

The president-elect began the press conference, his 13th since being elected, by repeating a statement his team released earlier in support of the $17.4 billion in aid to automakers. He declined to say whether he would seek to make any changes to it, arguing that he had not had time to review it thoroughly.

From NBC's Domenico Montanaro
Is anyone except Harry Reid happy with the Bush auto bailout?

Conservatives, some perhaps sensing the political winds with 2010 reelection bids at stake, are furious. Michigan Democrat John Dingell wanted more. And autoworker union President Ron Gettelfinger is irked that Bush singled out workers.

Minority Leader Mitch McConnell has "strong objections;" Sen. Lindsey Graham was "disappointed;" and even Sen. John McCain had "regrets" -- (he had a few).

Remember, this is the same John McCain, who "suspended his campaign" to try and strike a deal on the Wall Street bailout -- which was roughly 41 times the size of Detroit's.

"I regret the President's decision to give away over $17 billion to the domestic automakers," McCain said. "Just last week, the Senate rejected a bailout plan because it failed to provide assurances that the domestic manufacturers would fundamentally change the way they do business to ensure their long-term viability. I find it unacceptable that we would leave the American taxpayer with a tab of tens of billions of dollars while failing to receive any serious concessions from the industry."

Though, perhaps that's not surprising given McCain's prior sentiments about Michigan's jobs situation during the Republican primary.

"Sometimes you have to tell people things they don't want to hear," McCain said at a Jan. 10 debate. "There are jobs -- let's have a little straight talk -- there are some jobs that aren't coming back to Michigan."

On the other side of the aisle, Dingell expressed a different kind of outrage.

"While I applaud President Bush's decision to provide short term loans to the domestic automakers..." 

So far so good.

"...I have strong concerns about some of the conditions that were placed on these loans."

Here it comes.

Dingell called it "irresponsible during a time of economic crisis for the White House to insist that workers take further wage cuts on top of the historic concessions they have already made."

Then the class warfare.

"No one is asking corporate executives to reduce their salaries to levels similar to that of their Japanese counterparts," he said, "and no one required the employees of Citibank or AIG to take a pay cut."

But Bush wasn't the only target of Dingell's statement. 

"I strongly urge President-elect Obama to revisit this issue as his first priority upon being sworn in, and to ensure that assistance to the automakers is provided in a way that is fair to working Americans," he said.

Gettelfinger echoed Dingell's ire -- though, of course, with appreciation to the president as well.

"While we appreciate that President Bush has taken the emergency action needed to help America's auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers," Gettelfinger said. "These conditions were not included in the bipartisan legislation endorsed by the White House, which passed the House of Representatives and which won support from a majority of senators."

Just asking, but isn't it usually the case that when you've irritated everyone that you might have gotten it right? Or maybe not.

From NBC's Libby Leist
At a press conference with the Mexican Foreign Minister this morning, Secretary Rice warned Hamas against resuming violence after ending its six-month truce with Israel.
 
Rice said more violence would not help the people of Gaza and it would only "deliver deeper misery" in the Gaza strip.
 
Rice reiterated that President Abbas has the support of the international community to negotiate for a two-state solution and more violence by Hamas was not working in favor of the Palestinian people.
 
The Palestinian-Israeli peace process has slipped on the list of priorities for an Obama administration -- with the economy taking precedent in addition to Iraq and Afghanistan -- but it's one that will have to be dealt with.

Secretary Rice made achieving peace between the two sides the prime focus of her final two years in office, but she was unsuccessful in bridging an agreement.

Now, the Obama national security team takes up the challenge, and it will have to decide almost immediately how much to engage. With an economic crisis and two wars to manage the peace process may just get overshadowed.
 
NOTES: The Mexican Foreign Minister is in town for talks with U.S. officials about the Merida initiative, a U.S. effort to train and equip law enforcement officials in Mexico and Central American to help combat organized crime and drug trafficking.

From NBC's Mark Murray and Domenico Montanaro
Obama's transition office released the following statement from the president-elect: "Today's actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers. With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together -- including labor, dealers, creditors and suppliers -- to make the hard choices necessary to achieve long-term viability. The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely required to save this critical industry and the millions of American jobs that depend on it."

From NBC's Savannah Guthrie
In addition to his choices for Labor (Hilda Solis), Transportation (Ray LaHood) and U.S. Trade Representative (Ron Kirk), Obama will announce Karen Mills as his choice to head the Small Business Administration at his news conference later today.