WASHINGTON, Jan 9 (Reuters) - President-elect Barack Obama on Friday named retired Adm. Dennis Blair to oversee U.S. spy agencies as director of national intelligence, and chose former White House Chief of Staff Leon Panetta as CIA director.

Following are some of the major challenges the two would face if confirmed by the Senate.

CLOSING GUANTANAMO - Obama has pledged to close the prison for terrorism suspects at the U.S. Naval base at Guantanamo Bay, Cuba, a global symbol of U.S. detainee abuses in the war on terrorism. But the spy chiefs must help decide how to replace it and how to revise detention and interrogation practices in keeping with Obama's vows for more humane policies.

CATCHING OSAMA BIN LADEN - Officials of the outgoing Bush administration say with growing confidence that al Qaeda's central leadership has been largely neutralized. But bin Laden and his second-in-command, Ayman al Zawahri, remain at large more than seven years after the Sept. 11 attacks they masterminded.

MONITORING IRAN - U.S. spy agencies shifted gears in December 2007 with a national intelligence estimate that concluded Iran had stopped developing a nuclear warhead. Some critics of Iran said the report understated its threat and undermined a U.S.-led international campaign against Iran's nuclear program. Congress and others will be watching closely to see whether any new intelligence merits updating the estimate.

SECURITY OVERHAUL - Blair and two other intended senior members of Obama's security team have served on the Project for National Security Reform, which last November released a 500-page blueprint for overhauling the U.S. security system across government, and they are likely to bring those ideas with them. Among the recommendations are to combine the White House National Security Council and Homeland Security Council, which the Obama team is known to be considering.

WORKING TOGETHER - The Office of the Director of National Intelligence -- created in response to intelligence failures that contributed to the Sept. 11 attacks and Iraq war -- is relatively new and assumes some duties once held by the CIA. The effectiveness of the two agencies depends on a strong working relationship, but how to ensure that and prevent rivalries is still being worked out. (Reporting by Randall Mikkelsen; Editing by Xavier Briand)

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