The focus of election 2004 shifted to New Hampshire Tuesday after Massachusetts Sen. John Kerry (search) won the Iowa caucuses, jumping to the top of the heap in the first Democratic presidential test of the year.

Rep. Richard Gephardt (search), D-Mo., once considered the strongest contender in Iowa, garnered a measly 11 percent of votes from caucus attendees and officially dropped out of the race Tuesday afternoon.

"I accept results with the knowledge that I gave this campaign everything I had in me," he said, choking back tears. "My career in public office is coming to an end but the fight is never over ... Never stop fighting for what you believe in and never stop believing that we can make a difference."

A much more jubilant Kerry campaigned in New Hampshire early Tuesday.

"Thank you for a wonderful warm welcome on a cold morning in New Hampshire, and thank you for welcoming back to New Hampshire 'Comeback' Kerry," he told a cheering crowd.

But Kerry got down to election business quickly.

"The whole world will be watching what you do here, as they were watching in Iowa," he said. "It's your chance now — you're next."

Kerry capitalized Monday night on a late surge in the final days before the caucuses, pulling in 38 percent of the final tally.

Sen. John Edwards (search), D-N.C., came in second with 32 percent, while the one-time front-runner, former Vermont Gov. Howard Dean (search ), took a distant third with 18 percent.

Democratic National Committee Chairman Terry McAuliffe told Fox News Tuesday that a huge voter turnout in Iowa proved "there is a lot of excitement" about the election. "Our positive message, our vision for the future is working."

With Gephardt dropping out, seven candidates remain but the thrill is far from gone, said McAuliffe. "The field is beginning to winnow, but you can't tell who is going to win this thing. When it's over we are going to be unified on March 10. We're excited — we're raring to go."

The White House acknowledged the Democratic presidential hopefuls.

"We congratulate those candidates who did well," Press Secretary Scott McClellan told reporters Tuesday, not mentioning any of the candidates by name.

For more on the campaign, click to view Foxnews.com's You Decide 2004 page.

Edwards and Dean were back on the ground in New Hampshire by 3:30 a.m., both holding brief airport rallies to exhort the faithful who turned out to welcome them.

"I used to be the front-runner when I went out to Iowa, but I'm not the front-runner any more," Dean said in Portsmouth. "But New Hampshire has a great tradition of supporting the underdog. So guess what? Let's go get them."

Edwards was jubilant when he touched down at Concord.

"Can you feel it?" he asked cheering supporters. "The people of New Hampshire are going to feel it a week from tonight. We're going to sweep across the country and we're going to do it without the negative politics of cynicism."

Absent Gephardt, the Iowa candidates will now face Gen. Wesley Clark (search) and Sen. Joe Lieberman (search), D-Conn., who bypassed the caucuses, in New Hampshire.

Clark, a retired four-star Army general and one-time NATO supreme allied commander, held a rally in New Hampshire Tuesday and proclaimed before a throng of supporters: "Taking the White House isn't going to be easy, but it is within our reach."

Kerry admitted that duplicating his success in Iowa would not be easy.

"I go into New Hampshire still the underdog," he said Monday on Fox News' "On the Record With Greta Van Susteren." "I’m behind and I’m going to go in and fight as hard for every vote I can just like I did here in Iowa. I’m not going to stop until the votes are being cast next week."

• Photo Essay: Iowa Caucuses

"Iowa, I love you. Last night, the New England Patriots won. Tonight, this New Englander won and you sent me on the way to the Super Bowl. Thank you very much," Kerry told a ballroom packed with cheering supporters.

Kerry's strong support became evident as soon as media entrance polls were released shortly after caucusing began.

The numbers showed that Dean did not get the backing on the issues and constituencies thought to be central to his message.

In polling taken as Democratic voters entered the caucuses, 21 percent of first-time caucus-goers expressed an initial preference for Dean compared with 29 percent for Kerry and 24 percent for Edwards.

Dean was thought to be strongest among younger caucus attendees, but the entrance polls suggest he did not win this group.

"Of course, I'd rather come in first, but we didn't — and we're alive," Dean, the former Vermont governor who has raised more than $40 million and sent 3,500 volunteers to Iowa, said Monday night. "We just need to fight like crazy."

Pumping the air as if he'd won, Dean bellowed to supporters: "We will not quit now or ever," his voice hoarse, nearly a scream.

On Tuesday Dean defended his theatrical exuberance on stage, saying, "You've got to have some fun in this business."

Later Tuesday a toned-down Dean spoke in New Hampshire. "We need a balanced budget in this country," he said. "Not one Republican president has balanced the budget in 34 years. You cannot trust the right-wing Republicans with your money."

Caucus-goers were also asked which qualities mattered most in deciding their candidate. Of three top issues, "takes tough stands on the issues," "can beat Bush" and "has the right experience," Kerry came out on top. In the fourth measure — "cares about people like me" —Edwards topped the pack with 41 percent.

The survey of 1,665 people at 50 randomly selected Democratic caucus sites was conducted for The Associated Press and the five television networks — Fox News, CNN, CBS, NBC and ABC. Results were subject to a sampling error of plus or minus 4 percentage points.

The Kerry campaign said the senator's success was due in part to his ability to draw considerable anti-war support from Dean, who had campaigned against the war in Iraq and said that he would give authority to NATO to handle the security and reconstruction of the nation.

The entrance poll showed that 75 percent of caucus-goers opposed the war in Iraq, but among those who disapproved of going to war, Kerry won 34 percent of the vote compared with Dean's 24 percent.

Kerry voted for the resolution giving President Bush the authority to go to war, though he later revised his position, saying he believed he was giving the president authority to get support for use of force.

He has criticized Bush's coalition-building and diplomatic efforts and said he would seek to speed up the transfer of sovereignty to Iraqis.

Along with his criticisms of the war, Kerry has been quick to point out his "long list" of foreign policy experience, as compared to the former Vermont governor.

"I’ve taken on tough fights in foreign policy ... John McCain and I led the fight to open up Vietnam, to get answers for POWs and their families," Kerry told Fox News.

"My breadth of experience gives me the opportunity to use a steady hand in foreign policy today," he added.

At Dean's Iowa headquarters, campaign manager Joe Trippi told reporters that the attacks by other candidates, especially Gephardt, took their toll.

Trippi accused the other candidates of taking Dean's let's-be-positive, change-for-America message for themselves, and insisted that it was Dean's message and one the former Vermont governor would continue to use.

Pennsylvania Gov. Ed Rendell (search), a former head of the Democratic National Committee (search), said he believed Dean's drop was the result of a series of missteps.

"I think the worst comment was the Saddam Hussein comment," Rendell told Fox News, explaining that Dean erred when he said the United States was not safer as a result of the capture of the fallen Iraqi leader.

In another part of Des Moines, Edwards said he felt "terrific" after his come-from-behind showing, and staffers said he was pleased and gratified with the results.

Edwards said his strong showing was a result of his positive campaigning.

"The people of Iowa tonight confirmed that they believe in a positive uplifting vision that could change America," he said, adding that his campaign was now going to sweep the nation.

Fox News' Chris Wallace, Ellen Uchimiya and Sharon Kehnemui contributed to this report.