Obama and Clinton turn battle to New Hampshire

PORTSMOUTH, New Hampshire (Reuters) - Democrat Barack Obama, fresh from a dramatic victory in Iowa, took his presidential campaign to New Hampshire on Friday, where he hopes to deal a potential knock-out blow to one-time front-runner Hillary Clinton next week.

Clinton, the New York senator and former first lady who was forced into a disappointing third in Thursday’s Iowa caucuses behind Obama and former North Carolina Sen. John Edwards, suddenly finds herself in a possible must-win situation in next Tuesday’s New Hampshire primary.

Obama, an Illinois senator seeking to become the first black U.S. president, quickly tried to take advantage of his Iowa victory.

“New Hampshire, if you give me the same chance as Iowa gave me last night, I truly believe that I will be president of the United States of America,” Obama told about 1,000 cheering supporters in Portsmouth.

For Republicans, former Arkansas Gov. Mike Huckabee’s come-from-behind win over former Massachusetts Gov. Mitt Romney in Iowa on Thursday forced Romney into a scramble to hold on to New Hampshire where he faces a strong challenge from Arizona Sen. John McCain.

Romney, a multimillionaire who has invested heavily in his own campaign, had led New Hampshire polls for months but could see his presidential bid badly wounded if he does not win next Tuesday.

Iowa’s caucuses kicked off a state-by state process to pick the Democratic and Republican candidates to run in the November presidential election to replace President George W. Bush. The prize for the Iowa winners is valuable momentum and at least a temporary claim to the front-runner’s slot.

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A Reuters/C-SPAN/Zogby poll released on Friday gave Clinton and McCain, whose resurrected campaign was nearly declared dead last summer, leads in New Hampshire, but the polling was done before Iowa’s contest on Thursday.

Iowa turned into a battle among Democrats between Clinton’s message of experience and Obama’s of change which the first-term Illinois senator won decisively.

But Clinton stuck with the strategy of trying to raise questions about Obama’s level of experience on Friday, telling voters she alone had the experience and the toughness to win the November election and step straight into the White House.

There were hints from her campaign that she might get more aggressive in attacking Obama, which some Democrats said could backfire.

At a rally in Nashua, Clinton urged New Hampshire voters to think about who would be the best candidate to bring about change “based not only on a leap of faith.”

She said Democrats also needed a candidate “who will be able to withstand the Republican attack machine to get elected in the first place.”

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Clinton tried to play down her Iowa loss.

“I feel that we executed what we thought was the limit of what we could produce in Iowa under the circumstances that we were facing,” she told reporters at a cafe in Manchester.

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Trying to stop a media story line of a campaign in trouble, her aides orchestrated a conference call with reporters to pronounce her in good shape in New Hampshire and subsequent states.

Political pundits do not think former Baptist preacher Huckabee, who received strong support from evangelical Christians, has much of a chance in New Hampshire, giving him plenty of room for another surprise showing.

He appeared to be enjoying himself in the state on Friday, playing bass guitar in Henniker with a local band before an enthusiastic crowd of about 400.

“We sometimes need to remind people that those of us who are Republican have as much fun as anybody and today we want to prove it. ... Let’s rock the house,” he said.

Economic woes appear likely to play prominently in the campaign amid recession fears over the imploding housing market. The U.S. economy created a scant 18,000 jobs in December, a government report showed on Friday, far fewer than the predicted 70,000. Unemployment jumped to 5 percent, the highest since November 2005.

Wall Street gave a passing glance on Friday to the election kickoff in Iowa, and didn’t particularly like what it saw from Huckabee or Obama.

Financial markets typically feel more comfortable with Republicans in power because they are generally more friendly to business on such issues as taxes and regulation, but Huckabee does not fit that mold.

The concern with Obama was that polls show him as more electable than Clinton in November, raising investors’ worries that Democrats would end up in control of both Congress and the White House.

(Additional reporting by Ed Stoddard and John Whitesides in Manchester and Joanne Kenen and Emily Kaiser in Washington; Writing by Steve Holland, Editing by Frances Kerry and Stuart Grudgings)

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