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Mr Panetta has spoken out against the CIA's interrogation policy
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US President-elect Barack Obama has chosen Leon Panetta, a former congressman and Bill Clinton aide, to run the CIA, Democratic officials say.
The choice of Mr Panetta, who has no direct intelligence background, is surprising, correspondents say.
Mr Obama has also reportedly chosen retired US Navy Adm Dennis Blair to be his Director of National Intelligence.
He led anti-terrorism efforts in South-East Asia as chief of the navy's Pacific Command after the 9/11 attacks.
The selection of Mr Panetta is the the last major appointment for the incoming Obama administration, which takes office on 20 January.
Mr Obama faced the challenge of finding someone well acquainted with intelligence operations but not associated with the decision to allow extreme interrogation methods - which many consider to be torture - on terrorist suspects, correspondents say.
A CIA insider thought to be Mr Obama's first choice, John Brennan, withdrew his name amid criticism that he was not critical enough of Bush administration policies.
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