WASHINGTON - US President Barack Obama appeared poised on Friday to pick former Republican Senator Chuck Hagel as the next US defense secretary and the announcement may come early next week.

Sources on Capitol Hill and in the national security community said all signs were pointing to Hagel as Obama's choice to replace current Defense Secretary Leon Panetta.

The choice would likely set up a confirmation battle in the Senate over whether Hagel strongly supports key US ally Israel. Gay rights groups have also complained about some of Hagel's past remarks, which were seen as disparaging to them.

However, if Obama were to back down from picking Hagel, it would be the second embarrassment for him, after his preferred candidate for secretary of state, US ambassador to the United Nations Susan Rice, withdrew from consideration in the face of determined opposition.

The White House insisted Obama had not yet made a final decision on Hagel, but a source close to the situation said the White House had signaled to Hagel's camp that he remained Obama's leading candidate for the post.

The source said the process was on track for likely nomination announcement on Monday or Tuesday.

It was not known whether Obama had finalized his decision or if Hagel had been directly informed. The source said Hagel's closest advisers had received "messages of reassurance" in recent days in the face of a campaign by Hagel's critics aimed at derailing his nomination.

Hagel has already faced an onslaught over his record on Israel and Iran led by some pro-Israel groups and neo-conservatives.

He has also come under fire from gay rights groups for remarks questioning whether an "openly aggressively gay" nominee could be an effective US ambassador. Hagel last month issued an apology for the comment, made in 1998, saying it was "insensitive."

A Republican operative involved in the opposition to Hagel's nomination predicted he would have trouble getting confirmed by the Senate. "It's going to be a vicious fight," the operative said.

Hagel’s possible nomination had raised the objections of some American Jewish leaders who point out that the former Nebraska Republican senator, who left the Senate in 2008, had a problematic voting record on issues key to Israel – voting several times against US sanctions on Iran – and made disparaging remarks about the influence of what he called a “Jewish lobby” in Washington.

These comments were made to former US diplomat Aaron David Miller for his 2008 book, The Much Too Promised Land, in which Hagel was quoted as saying, “The Jewish lobby intimidates a lot of people up here.”

In 2001, Hagel was one of two senators who voted against renewing the Iran-Libya sanctions act, in 2007 he voted against placing the Iran Revolutionary Guards Corps on America’s list of terrorist organizations and in 2008 he voted against Iran sanctions.

Other problematic positions regarding Israel taken by Hagel include being one of only four senators in October 2000 who would not sign a letter of support for Israel during the second intifada, being only one of 12 senators in 2006 who refused to sign a letter calling on the EU to place Hezbollah on its terrorist lists and signing a 2009 letter – after he retired from the Senate – urging Obama to negotiate with Hamas.

But Hagel is not only under fire from Jewish or pro-Israel organizations, and on Friday he issued an apology for comments about gays he made during the 1998 approval process of a gay philanthropist, James Hormel, as the US ambassador to Luxembourg.

Hagel said in an interview at the time with an Omaha newspaper that Hormel was “openly, aggressively gay,” and that it would be an “inhibiting factor” for a US ambassador to be gay.

South Carolina Republican Sen. Lindsey Graham said Sunday that Hagel’s nomination process would be challenging and that he would probably not get many Republican votes, and on Friday Texas Republican John Cornyn told The Washington Post that he would vote against the nomination.

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