By Jeff Mason

WASHINGTON (Reuters) - President-elect Barack Obama honored his vanquished Republican rival John McCain, describing the Arizona senator as an "American hero" while the Democrat prepared to assume Tuesday the office that both men fought bitterly to attain.

Obama and McCain clashed repeatedly on the campaign trail over foreign and domestic policy in sometimes heated exchanges that occasionally veered into the personal.

But Obama made clear that period had passed even as he predicted the two would not always get along in the future.

"John is not known to bite his tongue and if I'm screwing up, he's going to let me know. And that's how it should be," Obama said, adding -- to applause -- that the presidency was just one branch of the U.S. government.

Obama will be sworn in as the nation's 44th president on Tuesday.

He spent the evening before his inauguration at dinners honoring McCain, former Secretary of State Colin Powell -- who broke with the Republican Party to endorse Obama -- and Vice President-elect Joe Biden.

Obama opened his remarks at McCain's dinner by calling the former Vietnam prisoner of war a hero who understood better than most what really matters in politics and calling for a new spirit of cooperation in Washington.

"There are few Americans who understand this need for common purpose and common effort better than John McCain," he said.

The two men embraced when Obama called McCain to the stage. With a humorous nod to their high-profile television debates before the November 4 election, Obama joked that McCain would have a chance to contradict the things being said about him.

"I'm here tonight to say a few words about an American hero who I have come to know very well and admire very much -- Senator John McCain," Obama began. "And then, according to the rules agreed to by both parties, John will have approximately thirty seconds to make a rebuttal."

McCain did not speak after Obama finished his remarks. The two exited the stage together, with Obama placing his hand on McCain's back.

(Editing by Chris Wilson)