By Steve Holland

WASHINGTON (Reuters) - Republican presidential candidate John McCain said on Monday if elected he would push to exclude Russia from the Group of Eight conclave of major industrial nations to punish Moscow for rolling back political freedoms.

"We need a new Western approach to this revanchist Russia," McCain wrote in a Foreign Affairs magazine article outlining his views on foreign policy looking ahead to the November 2008 election.

The Group of Eight, known as the G8, includes the United States, Britain, France, Italy, Germany, Canada, Japan and Russia. Their leaders gather each year in one of their countries to discuss major economic and political challenges facing the globe.

Russia is a fairly recent entry into the group, joining the Group of Seven in 1997, and President Vladimir Putin played host to the annual G8 summit in St. Petersburg in 2006.

McCain, an Arizona senator who frequently denigrates Putin, said the G8 should again become "a club of leading market democracies: It should include Brazil and India but exclude Russia."

"Today, we see in Russia diminishing political freedoms, a leadership dominated by a clique of former intelligence officers, efforts to bully democratic neighbors, such as Georgia, and attempts to manipulate Europe's dependence on Russian oil and gas," McCain wrote.

At age 71 trying to become the oldest American to win a first term as president, McCain said the challenges facing the country are such that "there will be no time for on-the-job training."

McCain sought to distance himself from the foreign policies of President George W. Bush in the article, never mentioning the current president, while singling out Bush's father, George H.W. Bush, for praise for forming a broad international coalition during the Gulf War of the early 1990s.

He said years of "mismanagement and failure in Iraq" are proof that the United States should go to war only with sufficient troop levels and with a realistic and comprehensive plan for success.

But he said the current U.S. troop build-up is working in Iraq and should be pursued, dismissing Democratic candidates who promise a quick pullout.

"The war in Iraq cannot be wished away, and it is a miscalculation of historic magnitude to believe that the consequence of failure will be limited to one administration or one party," he wrote.

McCain said if elected he would set up a new intelligence agency patterned after the Office of Strategic Services, the World War Two predecessor to the CIA, to fight "terrorist subversion around the world and in cyberspace."

"It could take risks that our bureaucracies today rarely consider taking -- such as deploying infiltrating agents without diplomatic cover in terrorist states and organizations -- and play a key role in frontline efforts to rebuild failed states," he said.

To fight climate change, McCain said he would do what the current administration has refused to do. He would agree to set reasonable caps on emissions of carbon dioxide and provide industries with tradable emissions credits.

(To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http://blogs.reuters.com/trail08/