* Cleared of wrongdoing in emails with Florida woman
* Known for ability to work with tribal leaders (Recasts with Allen, Panetta comments)
By Phil Stewart
WASHINGTON, Feb 19 (Reuters) - U.S. Marine General John Allen, who led NATO forces in Afghanistan and was caught up but later cleared in the scandal that forced CIA chief David Petraeus to resign, said Tuesday he will retire and forgo his nomination to become NATO's supreme allied commander because of his wife's health.
The decision ends the career of one of the U.S. military's most well-known leaders, who until Feb. 10 spent 19 months in Afghanistan trying to help wind down America's longest war and strengthen Afghanistan's military to fight insurgency.
Beyond the pressures of war, Allen faced a media frenzy over a high-profile Pentagon investigation that in January cleared him of wrongdoing in his email exchanges with a Florida socialite, Jill Kelley.
The emails came to light in an investigation of CIA chief and former General David Petraeus, who preceded Allen in Afghanistan and resigned his CIA position in November over an extramarital affair with his biographer, Paula Broadwell.
President Barack Obama and Defense Secretary Leon made no mention of that probe in statements on Tuesday, instead extolling Allen's 38-year military career. Obama cited Allen's "extraordinary service" in the Afghan war.
"Today, I met with General John Allen and accepted his request to retire from the military so that he can address health issues within his family," Obama said in a statement.
"I am grateful for the sacrifices made by his family in supporting him during his service."
Allen, in a statement, did not give details about his decision. "The reasons for my decision are personal. I did not come to it lightly or quickly, but given the considerations behind it, I recognized in the end it was the only choice I could make."
"While I won't go into the details, my primary concern is for the health of my wife, who has sacrificed so much for so long," he said.
HAILED AS BRILLIANT STRATEGIST
He said his wife, Kathy, had stood beside him for more than 35 years and he had spent much time away from her and his two daughters. "It is now my turn to stand beside them, to be there for them when they need me most," Allen said.
In an interview with the Washington Post, Allen said he wanted to focus on helping his wife cope with chronic health issues that included an autoimmune disorder.
Allen, as the head of U.S. and international forces in Afghanistan, was known for his ability to work with tribal sheikhs, a skill that also helped him turn the tide against al Qaeda in Anbar province in Iraq five years ago.
But his time in Afghanistan also was marked by a spate of incidents that enraged Afghans. They included video images of troops urinating on Taliban corpses and the burning of Korans and religious texts taken from a prison library. There were also a surge in so-called "insider attacks" on international forces by their Afghan partners.
Panetta called Allen one of the military's most outstanding battlefield leaders and a brilliant strategist, predicting Allen's leadership in Afghanistan would be remembered as "pivotal" to the 11-year-old campaign.
"The strategy he developed and implemented has put us on the right path towards completing this mission, with Afghan forces now on track to step into the lead for security nationwide this spring and to assume full security responsibility by the end of next year," Panetta said.
The White House had put his nomination to NATO on hold but after Allen was cleared said it intended to move forward with his nomination to the military's top job in Europe. (Additional reporting by Steve Holland and Matt Spetalnick; Editing by Will Dunham, Bill Trott and Cynthia Osterman)