MIDWINTER IN the heart of the Midwest, and the countdown to finding a successor to President George W Bush finally gets under way. On Thursday the holiday season will be finally done and dusted, allowing thousands of people in the state of Iowa to begin the complicated process of working out the likely runners and the also-rans in the 2008 presidential race. Known as the Iowa caucuses, the process will go a long way to determine who has the best chance of winning the Republican and Democrat national conventions and ending up in the White House when the US goes to the polls for real later in the year.

For the voters in the snow-clad Hawkeye State, the caucus season is having its earliest-ever start and although the system has been decried as a mixture of political necromancy and guesswork there is little doubt that it plays a role in setting the agenda for an election year. Following hard on the heels of the Iowa process is the New Hampshire primary election, which also has a habit of springing surprises as well as making and breaking reputations.

"Even this year, with the system being more frontloaded than it's ever been before, Iowa and New Hampshire have remained just as important to the presidential nominating process - if not more so," claims Professor Candice Nelson of the school of public affairs at American University, Washington DC.

Both parties have a stake in the outcome. The Democrats make their selections through a complicated voting system in which caucus-goers in the state's 1781 precincts decide whether candidates are "viable", that is, whether they have sufficient support to remain an option. This is followed by horse-trading as second preference votes are cast - and, as a veteran Democrat noted, that is when things can get interesting.

"We're fortunate in having three high-profile candidates, all of whom have been working hard to whip up support," she said. "The polls show they're running neck and neck at the moment but if they're too close the next stage could open up a gap. Hillary Clinton will have to make a good showing as she's vulnerable in a close field if the second preferences go against her."

For the Republicans, the Iowa caucuses are different. They operate what is in effect a straw poll, with voters being handed a blank sheet of paper on which to write the name of their preferred candidate. Ahead of the vote the runaway candidate is Mike Huckabee from Arkansas, a Baptist and a conservative who has built up a huge level of popular approval in this middle-of-the-road state. It is a moot point whether he can build on the momentum that has propelled him so far, but no-one doubts his sincerity or the fact that he has broad appeal.

Just as Hillary Clinton needs a good showing, so does Huckabee's closest rival, the multi-millionaire Mitt Romney. A defeat for him in Iowa followed by a lacklustre performance in New Hampshire would almost certainly signal the end of his campaign and make a mockery of the huge effort and even larger sums of money that have taken him this far. Any faltering on his part will almost certainly condemn him to being an also-ran, while Huckabee knows that he has done extremely well even to have survived.

Inevitably, given the fact that the Republicans are the ruling party, most interest in Iowa has centred on the Democrats, and that has narrowed down to the run-in between Clinton and Barack Obama. Both have strengths and weaknesses, and both would make ideal nominations for a tilt at the White House. Clinton is supported by large numbers of women, and her campaign has been helped immensely by the support offered by her husband, a former occupant of the White House. On the other hand, for all his inexperience, Obama is regarded as a fresh start and will attract the youth vote.

Faced with a three-horse race in the Democrat camp - John Edwards has made a powerful showing and might score off his rivals - most pollsters have been hedging their bets. There are some constants, such as the female vote for Clinton and the youth vote for Obama, but so far there has been no significant surge, making Iowa too close to call.

In addition, as Peter Brown of the Quinnipiac University Polling Institute in Connecticut makes clear, the caucuses have many other variables, including the weather conditions on the day itself and the earlier-than-usual date of the polls. "The greatest unknown in Iowa is who shows up," he said. "It's a bigger deal there than any place because you have so many other factors. You have the added uncertainty at this time of the early calendar, so students are not going to be on campus."

In fact, on past experience, only about one in 29 Iowans trouble themselves to participate in the caucuses, and that figure could fall if there are storms or if the winter temperatures, already glacial, decide to plummet.

As happens in all these election-year preliminaries, there is always the chance of an outsider pulling off a spectacular coup. Such an eventuality seems unlikely in the Democrats' camp, where there is little to choose between the big three, but the Republicans might throw up a surprise in deciding who takes third place. As former New York mayor Rudy Giuliani has virtually ruled himself out in Iowa, where he conceded early on that there was little point in making an effort, the odds look stacked in favour of John McCain's late run.

That would make sense. The well-respected senator will pick up support from conservatives who admire the fact that he is a war veteran and a straight talker. But he is considered to be too close to the president on immigration, and that could cost him. If he does falter, then the Texan veteran Ron Paul could slip through on the rails. A free-marketeer who speaks his mind, he gave one of the best analyses of the reasons for the war on terrorism when he said "they came over here because we went over there". It's a long shot - but in Iowa this week all bets are being taken.

the candidates

Huckabee and Romney carry the Republican standard and everything points to the former getting the nod. That will probably be the limit of his ambitions but Romney needs to make a reasonable showing if he is to have any chance of outstripping McCain and Giuliani in New Hampshire. The Iowa caucus might look mysterious, and even impenetrable, but it could be make-or-break time for Clinton and Romney.

Democrats Hillary Clinton Love her or hate her - there seems to be no middle way - Hillary Rodham Clinton has an immense appeal among women voters, and she carries a powerful talisman in the shape of her husband Bill. Whenever her campaign has faltered, the former president has ridden to her rescue, and there are many who would not be averse to seeing him back in public life. His wife's austere intellectualism is not to everyone's liking but she has a following - the latest Gallup poll hailed her as the world's most admired woman - and it is assumed that her tussle with Obama will eventually decide their party's nomination. Latest Iowa poll average: 29.2%.

John Edwards Making his second tilt for high political office, the former North Carolina senator will pick up working-class votes and could receive support from those who are undecided about Clinton and Obama. He has been an effective critic of the Bush administration, particularly of its foreign policy, and is widely admired for his political integrity. His populist rhetoric has gone down well in Iowa, where he has worked hard at getting his message across to the undecided. Latest Iowa poll average: 23.5%.

Barack Obama The Hawaiian-born youngster is perhaps the most intriguing candidate in either party, and a politician who could change the face of US politics. Although he has been slated for his lack of experience and has had to face claims of political opportunism, he has won kudos for his reforming principles and the promise of a fresh start. He appeals to young voters and black voters of all ages, but his lack of a proven political track record may tell against him. Latest Iowa poll average: 27.3%.

Also-rans: Joe Biden, Chris Dodd, Mike Gravel, Dennis Kucinich, Bill Richardson.

Republican Rudy Giuliani The much-admired former mayor of New York City brought some much-needed cohesion to the city in the aftermath of the terrorist attacks in 2001. Although he is considered a liberal - he supports gun control and is keen on gay rights - his strong stance on terrorism appeals to the right. Being twice divorced seems not to have harmed his chances, but his campaign has faltered due to illness.

Will do better in later primaries in Florida and California. Latest Iowa poll average: 6.4%.

Mike Huckabee The dark horse of the campaign suddenly shot ahead in the rankings, largely due to his religious beliefs and his conservative political philosophy. Slaughtering some pheasants during a Christmas shoot outraged the animal rights lobby, but he will do well in the Hawkeye State, whose voters have taken a shine to him. Lack of funding and the absence of a political hinterland will scupper him later. Lacks a coherent organisation, and there is a limit to how far his Forrest Gump decency will take him. Latest Iowa poll average 29.2%.

John McCain He will do better in New Hampshire, but is not unhopeful of picking up support in Iowa, where his military background will not do him any harm. A veteran of the Vietnam war, he was tortured while in enemy captivity and has been a critic of US policy towards detainees in Iraq. Supported the toppling of Saddam Hussein but would bring a more rigorous approach to US foreign policy. A recent surge has improved his chances following the late summer implosion of his campaign. Latest Iowa poll average: 10.2%.

Mitt Romney If money could buy votes the former governor of Massachusetts would be home and dry. A multi-millionaire who made his pile in the rocky shoals of venture capitalism, he has spent around $100 million on his campaign and believes strongly in the work ethic. His Mormon faith has been held against him, but he has the support of Wall Street and most of corporate America. Latest Iowa poll average: 25.5%.

Also-rans: Duncan Hunter, Ron Paul and Fred Thompson.