WASHINGTON - US President-elect Barack Obama holds his first face-to-face meeting with George W. Bush, outgoing president, since last week’s historic election victory. The 43rd and 44th US presidents focus on economic situation and foreign policy issues

President-elect Barack Obama returned to Chicago to work on setting up his new administration after getting his first look at the Oval Office during a nearly two-hour meeting with President George W. Bush to discuss the transfer of power at a time of war and financial crisis.

As the 43rd and 44th U.S. presidents held their first face-to-face talks since Election Day last week, the next first lady, Michelle Obama, talked with Laura Bush about raising daughters in the White House. At the end of their highly symbolic visit, Bush walked Obama to a waiting black limousine for the trip to the airport and the return flight by jet charter to his transition headquarters in Chicago. His team is working there to put together the next Cabinet and to fill the hundreds of jobs that come open in a change of administrations.

Neither Bush nor Obama made a statement before or after their meeting.

Back on track
Obama spokesman Robert Gibbs said the two men "talked extensively" about the economic situation and foreign policy. Obama inherits from Bush an economy in deep crisis and wars that are far from won in Iraq and Afghanistan, among other problems, when he takes office Jan. 20. Topics between them included the housing industry, foreclosures, the auto industry in crisis, as well as "the need to get the economy back on track," Gibbs said.

Obama's aides said the president-elect discussed with Bush the need for urgent action to help struggling U.S. automakers. Gibbs said "it was a discussion about the broad health of the industry" that was not just limited to any one of the three largest U.S. car makers.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid asked the administration this weekend to consider expanding the $700 billion bailout for financial firms to include car companies. At a news conference Friday, Obama said he hoped the Bush administration would "do everything it can to accelerate the retooling assistance for the industry that Congress has already enacted."

The White House did not reject such an idea. Presidential spokeswoman Dana Perino said Bush would listen to lawmakers if, when they come back for a post-election session, "they decide to try to do something more on the auto industry." She said Bush described the meeting as "constructive, relaxed and friendly," covering problems at home and abroad, and said he pledged a smooth transition. Bush gave Obama a sneak peek at White House highlights, such as the Lincoln Bedroom and the president's office in the residence, after their hour-plus in the Oval Office.

Bush has been at pains to make the transition as smooth and gracious as possible. He has publicly set aside any lingering hard feelings after the long and sometimes bitter presidential election campaign in which Obama convincingly defeated Republican John McCain, having hammered him as little more than a clone of the deeply unpopular Bush.

Bush chief of staff Josh Bolten and Obama transition manager John Podesta, himself a former White House chief of staff under President Bill Clinton, held their own talks after standing off to the side together in the Rose Garden watching their bosses walk by.

Palin blames Bush policies for defeat
Alaska Gov. Sarah Palin, amid speculation she will run for president in four years, blamed Bush administration policies for the defeat last week of the Republican ticket and prayed she wouldn't miss "an open door" for her next political opportunity."I'm like, OK, God, if there is an open door for me somewhere, this is what I always pray, I'm like, don't let me miss the open door," Palin said in an interview with Fox News on Monday.

"And if there is an open door in '12 or four years later, and if it is something that is going to be good for my family, for my state, for my nation, an opportunity for me, then I'll plow through that door."

Palin has been mentioned as a possible presidential candidate in 2012. She also could seek re-election in 2010 or challenge Sen. Lisa Murkowski.

Still uncertain is the fate of Sen. Ted Stevens, who is leading the vote count in his bid for another term but could be ousted by the Senate for his conviction on seven felony counts of failing to report more than $250,000 in gifts, mostly renovations on his home. If Stevens loses his seat, Palin could run for it in a special election.