The self-consistent cluster-embedding method is discussed theoreticall
y. A definition of the total energy for an embedded cluster has been i
ntroduced. The method has two advantages. (i) It can describe both loc
alized and band properties, including their excitations. (ii) It can g
ive a good description of the magnetic properties for both spin-ordere
d and spin-disordered states. The electronic structure of NiO is studi
ed using a high-quality basis set to calculate the electronic structur
e of a small embedded cluster and an antiferromagnetic insulating grou
nd state is obtained. The picture has both localized and band properti
es. A small energy gap separates the unoccupied and occupied nickel 3d
orbitals which are well localized. Each 3d orbital is attached to a p
articular nickel ion. Below the 3d levels are two diffuse oxygen 2p ba
nds, and above the 3d levels are oxygen 3s, nickel 4s, and oxygen 3p b
ands. Experimental data concerning photoemission and optical absorptio
n can be interpreted naturally. The spin magnetic moment of the nickel
ion is calculated correctly. The simulation of the spin-disordered st
ate shows that NiO remains as an insulator in the paramagnetic state.
The Neel temperature of NiO is calculated directly to give a reasonabl
e result. The Hubbard U parameter for nickel 3d electrons is estimated
. The calculation shows that the excited nickel 3d electrons are also
well localized and the overlaps are less than 4.5%. We propose the fol
lowing: The overlap of the excited 3d electrons is too small to form a
metallic band, but the overlap is sufficient for the ''hole'' to migr
ate through the crystal. In this sense, NiO is a charge-transfer insul
ator with a gap of about 4 eV (mostly from oxygen to nickel). The calc
ulated small energy gap (about 0.5 eV) provides the activation energy
of NiO which is supported by the experimental results.