In a short speech at her Iowa headquarters in Des Moines, she said was 'optimistic' and 'confident' about the New Hampshire primary on Tuesday.

"I am so ready for the rest of this campaign (across the US) and I am so ready to lead," Clinton said, flanked by her husband and ex-president Bill Clinton and daughter Chelsea.

For Obama the key appeared to be the younger voters in Iowa as opposed to the older voters who stayed with Senator Clinton but the bottom line was one of a persuasive line of bringing about change in Washington DC.

As Senator Clinton made the case for experience, her Illinois colleague pushed for change even as the former Senator from North Carolina John Edwards argued that only an outsider like himself can 'fix' Washington's troubles besides breaking the stranglehold of corporate lobbyists.

"I want to create a new electoral math. I don't want to practice division, I want to practice addition," Obama told his supporters.

The strategy worked -- more than half of all Democratic voters were first-time caucus-goers, who heavily favored Obama.

Image: New York Senator Hillary Clinton at a rally following the caucus in Des Moines, Iowa.

Photograph: Stan Honda/AFP/Getty Images