DES MOINES, Iowa -- Former North Carolina Sen. John Edwards' bid for the White House hung in the balance Thursday as he appeared headed for defeat in the crucial Iowa caucuses.

While final totals were not in, The Associated Press and major television networks projected that Illinois Sen. Barack Obama would win the Democratic caucuses in Iowa. Edwards and New York Sen. Hillary Clinton were in a tight race to finish second.

No candidate had more at stake in Iowa than Edwards, who placed a huge stack of his political chips on the Iowa caucuses.

Edwards now faces the daunting task of regrouping in two states where polls suggest he is starting way behind -- New Hampshire and South Carolina. And Edwards must do it without having the deep financial pockets of Obama and Clinton.

Edwards supporters gathered Thursday night in two ballrooms at the Renaissance Savery Hotel in downtown Des Moines, where they cheered when early returns showed Edwards leading. The rooms turned quiet, though, when CNN projected that Obama would win in Iowa.

Edwards spent Thursday campaigning across Iowa, beginning the day with a morning rally at a Des Moines union hall packed with 200 supporters.

In a voice hoarse from a 36-hour campaign swing through southern Iowa, Edwards sounded optimistic about his chances.

"There is an energy and momentum behind this campaign that cannot be stopped," he shouted, prompting chants of "Go John Go!"

Edwards was likely to take little time to reflect on the Iowa results. He was planning to board a jet early Friday morning to whisk him to Manchester, N.H., where he will have five days to make his case before that state's primary on Tuesday.

Edwards, 54, poured time and money into Iowa in the hope that a win would give him momentum heading into primary voting in other states.

That is what happened in 2004, when Edwards' strong second-place finish in Iowa transformed him from a little known one-term senator from North Carolina into a serious presidential contender and eventually onto the national ticket as John Kerry's vice presidential running mate.

Because of the lingering good will from 2004, Edwards started the Iowa race with a lead. But by summer he was eclipsed by Clinton and Obama, who had greater star power and more than twice as much campaign money.

Polls had suggested that Edwards was closing in recent weeks as Iowans focused on their choice.

Mark Kamps, a 53-year-old real estate broker from Iowa City, had been teetering between Edwards and Obama. On Thursday, he caucused for Edwards.

"He gives the Democratic Party the best chance of winning," Kamps said. "I think he is going to bring the party together. He appeals to the middle class."

Betsy Hickok, a 47-year-old writer and editor from Coraville, was also undecided. So she took Wednesday afternoon off from work and went "rally hopping" at events for Obama, Edwards, Sen. Joe Biden and New Mexico Gov. Bill Richardson.

She chose Edwards.

"I was really impressed with his message and demeanor and his passion," she said.

Hickok said Edwards would be more seasoned than Obama in dealing with entrenched Washington interests. She said Clinton has too much baggage to get elected.

Rene Rubillard, a 63-year-old retired school teacher from Iowa City, backed Clinton "because I think she has the experience and the smarts."

Edwards courted liberal and disaffected voters upset with the country's direction. He apologized for his Senate vote to authorize the war in Iraq, wooed organized labor and working people, and emphasized his small-town roots to persuade rural voters -- who have disproportionate weight under the caucus system -- to back him.

It was a retooled Edwards that Iowans saw this time. Gone was some of the sunny optimism of 2004, replaced with a grittier populist attack that had Edwards hammering at the excesses of corporate America.

Edwards drew a sharp picture of inequities in America -- a CEO making more than $100 million per year and a little girl dying because she couldn't get a transplant; record oil company profits and single mothers being turned away from a Des Moines homeless shelter.

Even though the nation is at war, Edwards touched only lightly on foreign policy and defense issues. Instead, he tapped into worries about the economy, whether it was fears of job losses, worries about the lack of health insurance or rising college costs. One of the symbols of his campaign was a worker laid off at a Maytag plant in Newton, where 2,300 people lost their jobs because of a corporate takeover.

That made a big impression on Jim Heimstra, 52, of Kelly, who lost his job making washing machines at the Maytag plant this summer after working there for 29 years. He is now attending a community college to learn computer skills. On Thursday, Heimstra caucused for Edwards.

Some voters, such as Ted Piscitelli of Marshalltown, chose Edwards by process of elimination. Piscitelli, a 65-year-old retired Army sergeant and merchant, said Obama is too inexperienced and Clinton is "too much more of the same of what we had."

"We need to get big business corralled a little bit," he said.

Jean Frazier, a 51-year-old legal secretary from Iowa City, said she would caucus for Edwards because he was the most electable.

"I think he has the best chance to win," Frazier said. "I think there are lot of Republicans who won't vote for for Sen. Clinton or Sen. Obama. But they might vote for Sen. Edwards."

Several caucus participants noted that Edwards' Southern roots would make him more competitive. The last two Democratic presidents, Bill Clinton and Jimmy Carter, were from the South.