UPDATE 1-US Senate unanimously passes defense spending bill

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* Key challenge is brief time for House, Senate negotiators

* Bill lifts ban on using health insurance for abortion care

WASHINGTON, Dec 4 (Reuters) - The U.S. Senate voted 98-0 on Tuesday to approve a wide-ranging defense bill that authorizes $631.4 billion in funding for the military, the war in Afghanistan and nuclear weapons.

The bill, passed after five days of debate and consideration of hundreds of amendments, must be reconciled with the version passed by the House of Representatives before it can go to President Barack Obama to be signed into law.

There are several key differences between the House and Senate bills, including whether to back continued work by the military on developing biofuels for jets and warships.

Senate Armed Services Committee Chairman Carl Levin said the key challenge facing the bill's enactment was the short amount of time available for House and Senate negotiators to come up with a compromise version before the end of this Congress. He said staff discussions had already begun.

The top Republican on the committee, Senator John McCain, said he was confident that the House and Senate would be able to resolve the differences between the two bills.

Both senators said they were pleased that they had been able to shepherd the bill to Senate passage under an open process that allowed debate on amendments without having to deal with any threatened procedural roadblocks known as filibusters.

Senate Majority Leader Harry Reid, a Democrat, has promised to try to change Senate rules when the new congress convenes next month to curb filibusters, which have become commonplace.

The Senate bill includes a new round of Iran sanctions, a permanent ban on transferring detainees from the Guantanamo prison camp on Cuba to the United States, and prohibitions on the military detention of U.S. citizens.

A measure included in the bill would require U.S. defense contractors that work on classified programs to notify the government if their computer networks are breached.

It would also require the Pentagon to consult lawmakers if it decides to elevate U.S. Cyber Command to a full unified combatant command, on the same footing as its parent Strategic Command and the Defense Department's eight other top-level military units.

The bill also bans funding for a missile defense project funded jointly by the United States, Germany and Italy - the Medium Extended Air Defense System (MEADS) that is built by Lockheed Martin Corp and its partners in Italy and Germany.

VETO THREAT BY WHITE HOUSE

Defense Secretary Leon Panetta had urged lawmakers to include $400.9 million as final funding for the program, which is being discontinued after this year.

The White House threatened to veto the bill over the changes to the Pentagon's proposed budget and the restrictions on transfers of Guantanamo detainees.

The bill includes a provision that would lift the ban on women in the military using their health insurance for abortion care in cases of rape or incest, and another that would require creation of a comprehensive suicide-prevention program.

It also includes an overhaul of wartime contracting rules after the Commission on Wartime Contracting in Iraq and Afghanistan found the United States had squandered up to $60 billion through waste and fraud on contracts in those countries.

It would authorize an increase of up to 1,000 Marine Corps personnel assigned to provide security at U.S. embassies and other facilities, a response to the deadly attack in Benghazi, Libya that killed the U.S. ambassador and three others.

The bill also requires the Pentagon to submit reports on the resources needed for its planned "pivot" to the Asia-Pacific region; possible military options in Syria, and the risks involved with reducing U.S. forces in Afghanistan.

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