Des Moines, Iowa: Democratic Senator Barack Obama promised on Thursday to bring change to America if he wins his historic bid to be the first black US president.

"They said this day would never come," Obama told thousands of supporters after winning the Iowa Democratic caucus and defeating Senator Hillary Clinton.

"They said our sights were set too high. They said this country was too divided, too disillusioned to ever come together," Obama said. "But on this January night at this defining moment in history, you have done what the cynics said we couldn't do."

On the Republican side, Mike Huckabee capped a stunning political rise to beat Republican rival Mitt Romney.

Senator Chris Dodd of Connecticut, who received less than 1 per cent in the caucuses, decided to drop out of the presidential race, campaign sources said. Senator Joe Biden also dropped his bid, sources said.

The 2008 campaign is the most open presidential race in more than 50 years, with no sitting president or vice president seeking their party's nomination.

The Iowa contest was the most hotly contested in the state's history. Turnout among Democrats topped 220,000, smashing the previous record of 124,000 in 2004.

All eyes now turn to New Hampshire, which holds the next contest on Tuesday and where Romney and Clinton will face high-pressure bids to revive their candidacies.