WASHINGTON, Dec 1 (Reuters) – Here are some possible implications for U.S. defense policy of President-elect Barack Obama’s decision, announced on Monday, to retain Defense Secretary Robert Gates.

IRAQ — A PULLOUT, BUT PACE UNCLEAR

Both Obama and Gates are committed to reducing U.S. troop levels in Iraq but have disagreed over timing. Obama on Monday restated that he favored a timetable that would have U.S. combat forces out of Iraq within 16 months of his taking office but he said he would seek advice from his military commanders.

Gates has argued pullouts should be based on advice from military commanders about the security situation.

Dramatically improved security in Iraq means their past differences may not matter much — if stability in Iraq holds, U.S. commanders will be able to recommend substantial troop cuts and Obama says he favors leaving a “residual force” in Iraq anyway after the withdrawal of combat troops.

AFGHANISTAN — MORE TROOPS BUT STRATEGY UNDEFINED

Both Obama and Gates are committed to sending more U.S. forces to Afghanistan to tackle rising insurgent violence. U.S. military planners are already working to identify a prospective force of more than 20,000 combat and support troops.

But the precise strategy they will implement remains to be determined. The Bush administration, the U.S. military’s Joint Staff and the U.S. Central Command under U.S. Army Gen. David Petraeus, which is responsible for that military region, are all undertaking reviews of U.S. policy toward Afghanistan.

GUANTANAMO BAY — CLOSURE LIKELY

Both Obama and Gates have said they want to close the U.S. military prison for foreign terrorism suspects at Guantanamo Bay, Cuba, which has attracted worldwide condemnation. But Gates has said any effort to close the prison would require legislation from the U.S. Congress, for example to ensure that no Guantanamo detainee would have the right to emigrate to the United States. He said in October the next U.S. administration should address the issue early in its term.

MISSILE DEFENSE — TO CONTINUE WITH MORE SCRUTINY

The United States will continue to develop its system to defend the United States and its allies from ballistic missile attack by nations such as Iran or North Korea. Both Gates and Obama support the system but Obama’s advisers have said it will now face closer scrutiny.

SIZE OF U.S. MILITARY — TO INCREASE AS PLANNED

Obama has backed the Bush administration’s program to increase the size of the U.S. military’s stretched ground forces. He restated his commitment to a larger military at Monday’s news conference.

WEAPONS PROGRAMS — INVESTMENT, BUT SQUEEZE MAY COME

Obama’s pick signals continuity in the defense budget, at least for the rest of fiscal 2009 and fiscal 2010, which may prove reassuring to shareholders in big defense companies.

But budget pressures and the global economic crisis means the new administration will have to examine costly weapons programs closely soon after taking office, and some big-ticket deals may be cut back or killed entirely, especially if they are focused on distant future threats.