Haley
President Donald Trump meets with U.N. Ambassador Nikki Haley in the Oval Office of the White House in Washington, Oct. 9, 2018. REUTERS/Jonathan Ernst

Nikki Haley, a rising Republican star, said on Tuesday she was stepping down as U.S. ambassador to the United Nations, but knocked down speculation that she might challenge President Donald Trump at the next election.

Sitting beside Trump in the Oval Office, Haley said her 18-month stint at the United Nations had been "an honor of a lifetime" and that she would stay on until the end of the year.

A former governor of South Carolina and the daughter of Indian immigrants, Haley, 46, is the highest profile woman inTrump's Cabinet and has often been seen as a possible presidential candidate.

Haley criticized Trump during the 2016 election campaign but has been the face of his "America First" policies at the United Nations, steering the U.S. withdrawal from several U.N. programs and ardently defending his hard-line policies against Iran and North Korea over their nuclear programs.

Haley said in her resignation letter to Trump that she would "surely not be a candidate for any office in 2020" and would instead support his re-election bid. She referred to returning to the private sector and some media reports said she had debts to pay off.

But Haley also said she did not have any future plans set, and her decision surprised many at the White House and theUnited Nations.

Speaking to reporters later on Tuesday aboard Air Force One, Trump said he had five people on his short list for U.N. envoy, including former White House adviser Dina Powell, a friend of Haley's. Trump said U.S. ambassador to Germany, Richard Grenell, was not on the short list but that he was willing to consider him.

Trump's eldest daughter Ivanka Trump, who is a senior adviser to her father, ruled herself out of consideration in a Twitter post. He had said she would be "incredible" in the role and acknowledged he would be accused of nepotism if he nominated her.

HIGH PRAISE

Trump said Haley had told him six months ago that she was thinking of leaving by the end the year "to take a little time off." He was effusive in his praise of her.

"She has done an incredible job. She is a fantastic person, very importantly, but she also is somebody that gets it," Trump said on Tuesday. "She's done a fantastic job and we've done a fantastic job together."

Haley's name has come up as possible Republican running mate in the last two presidential elections and she could also become a U.S. senator if fellow South Carolina Republican Lindsey Graham takes up a job in the Trump administration, as is often speculated.

Trump suggested the two of them jointly announce Haley's departure in the Oval Office, an administration official said, noting that Haley was the only outgoing senior member of Trump’s administration to be feted in this way.

Returning the favor, Haley praised Trump and his family for their support.

She described Jared Kushner, Trump's son-in-law and aide, as "such a hidden genius that no one understands" for his work on renegotiating the NAFTA trade deal and preparing a long-awaited Middle East peace plan that has not yet been released.

The feel-good nature of her resignation was markedly different from other high-profile departures from Trump'sCabinet. Trump unceremoniously announced his firing of former secretary of state Rex Tillerson in March in a tweet.

Haley was seen by her counterparts at the United Nations as a voice of clarity in a U.S. administration that often gave off mixed signals on foreign policy, diplomats say.

"Nikki Haley is one of the most talented, most authentic U.S. government officials that I have ever met," said U.N. ambassador for France, Francois Delattre.

But she has been overshadowed in recent months by the appointments of Trump loyalist Mike Pompeo as secretary of state and hawk John Bolton as White House national security adviser.

Pompeo has led policy on talks with North Korea, while Bolton has taken the lead on trying to implement Trump's hard line against Iran.

DOMESTIC CREDENTIALS

A convert to Christianity in her 20s after being raised a Sikh,Haley is popular with religious conservatives in the South.

Her status as a potential candidate for national high officewas boosted in 2015 when she ordered the Confederate battle flag to be pulled down at South Carolina's state capitol grounds after a white supremacist gunman shot dead nine black worshipers at a church in Charleston.

Haley has also applauded women who come forward to denounce sexual abuse or misconduct by men and said they should be heard, even if they are accusing Trump.

"Women who accuse anyone should be heard," Haley said last December after accusations against three members of Congress. "They should be heard, and they should be dealt with."

Referring to women whose accusations brought down powerful men, like movie producer Harvey Weinstein, Haley said: "I'm proud of their strength. I'm proud of their courage."

Haley has long taken a tougher public stance on Russia than Trump, who has sought better relations with President Vladimir Putin.

Haley raised eyebrows within the administration when she announced in April that Washington was going to impose sanctions on Moscow over its support of Syria's government. Trump then decided not to go ahead with the move.

Haley fought against what she called anti-Israel bias at theUnited Nations, and sometimes seemed to be channelingTrump's abrasive style of diplomacy.

Last year, she upset U.S. allies and foes alike by warning that the United States would be "taking names" of countries that backed a U.N. resolution criticizing Trump's decision to recognize Jerusalem as Israel's capital.

Echoing previous statements from Trump, Haley said on Tuesday that the United States under his presidency is now respected around the world.

"Now the United States is respected. Countries may not like what we do, but they respect what we do. They know that if we say we're going to do something, we follow it through," she said.

(Reporting by Roberta Rampton, Steve Holland in Washington and Michelle Nichols at the United Nations; additional reporting by Doina Chiacu, Makini Brice, Susan Heavey, Patricia Zengerle and Lisa Lambert in Washington; Writing by Alistair Bell; editing by Mary Milliken, Jonathan Oatis and Grant McCool)

-Reuters