DES MOINES — Senator Clinton will head to New Hampshire a wounded candidate after finishing a disappointing third place in the Iowa caucuses won handily last night by Senator Obama.

The freshman Illinois senator pulled away from his top two rivals after a year-long race that had looked too close to call through the final day, winning by eight points with 38% of the vote. With 97% of the 1,781 precincts reporting, a former North Carolina senator, John Edwards, took 30%, and Mrs. Clinton took 29%.

Obama

Among the Republicans, with 87% of precincts reported, Michael Huckabee had the support of 34% of caucus-goers, while Mitt Romney had 26%, and third place was neck-and-neck between Fred Thompson and Senator McCain, at 13%. (For more on the GOP, please see page 5).

Two Democratic senators in the race, Joseph Biden and Christopher Dodd, had very poor showings and signaled late last night that they intended to drop out of the race. Governor Richardson, who finished in fourth place with 2% of the vote, said he would take his campaign to New Hampshire.

Mrs. Clinton’s campaign had been dampening expectations for a victory in recent days and weeks.

When she addressed a packed ballroom of supporters shortly before 10:30 p.m. Eastern time last night, the former first lady tried to avoid betraying any sense of disappointment. “This is a great night for Democrats,” she told the crowd, congratulating each of her opponents but never once mentioning the word “defeat.”

As the crowd cheered, Mrs. Clinton immediately vowed to sustain her bid to become America’s first woman president. “We’re going to take this enthusiasm and go right to New Hampshire tonight,” she said.

Saying “we always planned to run a national campaign,” Mrs. Clinton said the race should now turn answering the question of “how we will win in November 2008 by nominating a candidate who can go the distance and who is ready to be president from day one.”

The Clinton campaign turned right to downplaying the results in their favor, hoping both to explain her loss and stem the flood of momentum that is likely headed Mr. Obama’s way.

The next ballots will be cast in New Hampshire in just five days, making it difficult for Mrs. Clinton to regroup in time.

Mrs. Clinton’s supporters often cite the fact that Mr. Obama hails from a neighboring state and that Mr. Edwards has devoted extensive time in the state in the years since he first ran for president in 2004.

They returned to those arguments in the wake of her defeat last night. “Every point from mid-state east was Barack Obama’s home court,” New York’s lieutenant governor, David Paterson, said in an interview, though he added he was “not in any way trying to diminish” Mr. Obama’s victory.

However, for Mrs. Clinton, who led polls and exuded an aura of inevitability for months last year, the defeat in Iowa could be crushing. Mr. Obama had already closed the gap in New Hampshire, and the rush of attention he will gain from a victory in Iowa could propel him even higher.

Immediately trying to seize the momentum, Mr. Obama cast his victory in historic terms as he addressed supporters in Des Moines late last night. He returned to the theme that began his campaign nearly a year ago, describing the Iowa result as a triumph over convention and the cynicism of the established political culture. “They said this day would never come.

They said our sights were set too high,” he said. “They said this country was too divided, too disillusioned to ever come around a common purpose but on this January night, on this defining moment in history, you have done what the cynics said we couldn’t do.”

The result likely will renew speculation about a staff shakeup in the Clinton campaign, and it will increase pressure on her to confront Mr. Obama more directly, perhaps with negative ads.

One disappointed supporter in Des Moines last night, Diana Agrest, blamed Mrs. Clinton’s advisers, saying they had made her “too soft” in the closing weeks of the campaign. “I think they told her to be someone she’s not,” she said, adding that they “need a shake up.”

Mr. Paterson praised Mrs. Clinton’s organization in the state, but he said any time a campaign loses as it did, “it certainly is good to self-examine.”

Mrs. Clinton likely suffered from the complex and often chaotic caucus process in Iowa, in which voters headed to precinct locations last night and literally stood for their candidate of choice. The rules stipulated that candidates in each precinct who did not reach a minimum 15% threshold were not viable, meaning their supporters had to turn to another contender or choose not to vote.

Lower-tier candidates such as Mr. Biden of Delaware, Mr. Dodd of Connecticut, and Mr. Richardson of New Mexico had combined support of more than 10% in the polls, meaning that the second choice of their supporters could have been decisive.

Polls heading into last night showed Messrs. Obama and Edwards leading Mrs. Clinton in the second choice category.

Mr. Obama also appeared to benefit from a turnout of 239,000 Democrats that exceeded all expectations, which centered around 150,000.

The enthusiasm and support for Mr. Obama was palpable at a precinct in downtown Des Moines, home to many young professionals and students from nearby Drake University.

Of the more than 200 caucus-goers at that location, more than half voted for the Illinois senator. Mrs. Clinton had 40 after the first ballot, while Mr. Edwards had 37. Just 60 Democratic caucus-goers had showed up at the same precinct in 2004.

No deals were struck, but supporters of the leading candidates tried almost anything to lure Biden and Dodd supporters to their corner of a packed community center hall; one woman offered fresh baked cookies, while an Edwards supporter took several minutes to explain his plan for universal health care to a Dodd voter.

Even among precinct leaders, confusion reigned. When the Biden camp doggedly tried to convince supporters of nearly every candidate to help him reach the 15% threshold, the precinct chairman announced that it was against the law for a candidate who was unviable to reach the threshold.

“No, it’s not!” the Biden precinct captain, Noelle Mook, said. She demanded to consult the rule books, and minutes later, the precinct chairman, Daniel Gray, addressed the room again. “May I have your attention? Scratch the last announcement.”

After several more minutes, they sorted out the confusion, and in the end, all three leading candidates took one of the three delegates awarded to the precinct.