The Debate of Democrats in the Election in 2008

Barack Obama has challenged rival Hillary Rodham Clinton's candour and trustworthiness while trying to distance himself from a contributor facing criminal charges, as the Democratic presidential campaign took on an increasingly mean twist.

Republican candidates, meanwhile, seized on America's financial worries to tout their own economic credentials as a wide-open presidential nomination contest moves forward.

The Democrats also have been pushing their own economic plans, but they were overshadowed by more bickering between the front runners as Obama said Clinton has indulged in doubletalk on bankruptcy laws, trade and other issues.

Obama and Clinton clashed bitterly over questions of truthfulness and consistency in a televised debate on Tuesday.

On Wednesday, Obama was forced to distance himself from a contributor who faces fraud and extortion charges after Clinton seized upon it.

Obama said he had no indication of any problems when he accepted thousands of dollars in campaign contributions from Antoin "Tony" Rezko.

Politicians "don't always say what they mean, or mean what they say," the Illinois senator told about 900 people at Winthrop University in South Carolina, where the next Democratic contest is taking place. "That is what this debate in this party is all about."

"My relationship is he was somebody who I knew and had been a supporter for many years, he was somebody who had supported a wide range of candidates all throughout Illinois," the Democratic presidential candidate said in an interview with CBS television's Early Show.

Some $US86,000 ($A99,000) has been sent by the Obama campaign to various charities after the money was linked in some way to Rezko.

Former President Bill Clinton sought to lower expectations for his wife in the South Carolina primary while raising them for Obama.

He told a crowd of about 100 people in Charleston he was proud of the Democratic Party for having a woman and a black candidate and he understands why Obama is drawing support among blacks, who are expected to makeup at least half the primary turnout.

"As far as I can tell, neither Senator Obama nor Hillary have lost votes because of their race or gender. They are getting votes, to be sure, because of their race or gender - that's why people tell me Hillary doesn't have a chance of winning here," Clinton said.

"But that's understandable because people are proud when someone who they identify with emerges for the first time."

Former North Carolina senator John Edwards, who acknowledged that he got his "butt kicked" last week in Nevada, has staked his fading hopes on South Carolina, the state where he was born and whose primary he won in 2004.

He won the endorsement of one of the state's largest unions, the Communications Workers of America, as he gave details of an economic plan his campaign said would offer the state's struggling economy $US1.5 billion ($A1.73 billion) in relief.

On the Republican side, candidates campaigned on the weak US economy ahead of the January 29 contest in Florida, which looms as the final single-state test before both campaigns go national with more than 20 primaries and caucuses on February 5.

Millionaire Mitt Romney touted his business experience in a new ad released in that state.

"I know how America works because I spent my life in the real economy," says the man who made millions as a venture capitalist. "My plan will make America strong."

The Republican race remains fragmented, as three candidates - Romney, Arizona Senator John McCain and preacher turned politician Mike Huckabee - have split the spoils in contests that netted three different winners in six states.

In Orlando, Florida, McCain said he believes the US economy can recover despite anxiety of a prospective recession.

"Our economy is experiencing significant challenges," the Arizona senator said. "I believe the fundamentals of our economy are still strong. And, nothing is inevitable, and I am convinced that we can make a comeback."

McCain spent the morning at an Orlando company that makes spas and hot tubs, meeting with local business leaders and holding an economic round-table with them.

The former Vietnam prisoner of war was endorsed by retired Army General Norman Schwarzkopf.

"Senator John McCain has served our country with honour in war and in peace," Schwarzkopf, who commanded US forces in the 1991 Persian Gulf war, said in a statement released by the campaign. "He has demonstrated the type of courageous leadership our country sorely needs at this time."

The Republican field narrowed on Tuesday as ex-TV star and former Tennessee Senator Fred Thompson quit after a series of poor finishes.