With only 25 days remaining until Election Day and with many national polls showing the candidates in a statistical dead heat, President Bush (searchand Sen. John Kerry (searchwill debate for the second time Friday night -- this time taking questions from a selected audience of voters.

The debate at Washington University in St. Louis, a popular venue in past years on the presidential circuit, takes place at 9 p.m. EDT. FOX News Channel coverage begins at 8 p.m. EDT.

A third and final debate takes place Oct. 13 in Tempe, Ariz., and will focus on economic and domestic policy.

A government unemployment report -- the last to be released before Election Day -- provided fresh fodder for the campaigns. Unemployment held steady at 5.4 percent but job creation was lower than expected.

Click here to read Friday's edition of FOXNews.com's daily campaign digest, Trail Tales.

Bush cast the addition of 96,000 jobs as proof his tax cuts have bolstered the jobs market and the economy overall, while Kerry pointed out that the country has seen a net job loss under the Bush administration, a first since the Depression.

"The job picture going forward should look pretty good," White House Budget Director Josh Bolton told FOX News, adding that Bush inherited a recession before the Sept. 11, 2001, attacks caused massive losses and corporate scandals made the headlines.

"Given where we've come from, I think the president has a very strong economic record," Bolton said. "You never want to see job losses anywhere but the record overall is looking pretty good."

Bush's campaign unveiled an advertisement for national cable networks that touts "nearly 2 million jobs in just over a year," resulting in "nearly 2 million more people back working," and "nearly 2 million more people with wages."

Kerry called the number "disappointing" and contended that even the jobs that have been created under Bush pay less and offer fewer benefits than those that have been lost.

"The president does not seem to understand how many middle-class families are being squeezed by falling incomes and spiraling health care, tuition and energy costs," the Massachusetts senator said in a statement.

Although voters cite Iraq as a major concern, the economy consistently ranks at the top.

A Different Type of Debate

While Kerry laid low for two days outside of Denver preparing for the debate, Bush mixed campaign appearances with his prep time, arriving in Missouri after a rally in Wisconsin.

After the first debate on Sept. 30, the verdict from analysts and partisans alike was that Bush had stumbled and scowled and Kerry had reversed a downward trend in the polls. Eyes will be on Kerry Friday night to see if he can score a repeat. Bush has watched tapes of last week's debate. Many expect that the president will fare better during Friday's format.

 "This is not going to be a debate about how high your SAT scores are, but this is a debate about how much we like you," said image consultant Eric Dezenhall.

While Kerry has to be sure not to look like "he just got off a polo horse," Dezenhall said, Bush needs to look like "he's not resentful" at having to be there in the first place.

There will be no limits on the topics that can be raised by the audience, mostly a group of 100-150 "soft" Kerry and Bush voters. The debate will be moderated by Charles Gibson of ABC. Only Gibson and the 15 to 20 people chosen to ask questions know what topics will be raised during the 90-minute session.

There will be an equal number of questions on foreign policy and domestic issues, split evenly between the candidates. It's up to Gibson which audience questions to use. Voters in the audience must ask their questions exactly as written, or Gibson will cut them off.

"The bottom line, I think, is that this debate is going to offer a very clear difference on the economy and on the War on Terror," said Bush-Cheney campaign manager Ken Mehlman. "On the War on Terror, this president will take the battle to the terrorists, that if we're fighting them in Baghdad and Kandahar, we're safer in Boston and Kansas City. On the economy we believe in lower taxes. We believe in fewer lawsuits. We believe in less red tape."

But Joe Lockhart, a senior adviser to the Kerry camp, said Bush and his team are in denial about the real state of affairs in Iraq, the U.S. economy and elsewhere.

"We think the president sees the world through rose-colored glasses," Lockhart said, bringing another adviser, Mike McCurry, who was wearing a pair of paper white-rimmed, rose-colored glasses, into the FOX News camera view.

As for how Kerry would do better at diplomacy, particularly on the issue of Iraq, Lockhart said a Kerry administration would try to gain the world's trust. "John Kerry will bring a fresh start and I think the world will respond."

Topic A: Iraq

The issue in the campaign is not really Kerry's support for the decision to go to war against Iraq, as many Democrats voted for that authorization, but rather how the U.S. went to war, Missouri Rep. Dick Gephardt , one of Kerry's former rivals for the Democratic nomination, told FOX News on Friday.

"The question is how we went to war and whether that war has taken our focus off of the other terrorists in the world, like Usama bin Laden," Gephardt said.

Missouri Sen. Jim Talent, a Bush campaign co-chairman, said he "heard Dick Gephardt's interview, and except what he said about the [St. Louis] Cardinals, everything he said was wrong."

Asked what Bush needs to do to win Friday night after "losing" the first debate, Talent said: "Listen, I think he won the first debate, but set that aside. He needs to bring out his differences with Senator Kerry. And whether on the war or the economy or whatever, they couldn't be more profound. [Kerry] has been taking positions relative to the war that he needs to take for political purposes at that moment."

Asked what the number-one issue is for residents of the Show-Me State, which is one of the so-called swing states, Talent said, "I think probably the war and then jobs, growth and the economy. I've said for months that Bush's positions on these issues will resonate in the heartland and I think they will."

One issue that likely will come up is whether Saddam Hussein intended to manufacture and use weapons of mass destruction.

A report by the chief U.S. arms inspector in Iraq released Wednesday, known as the "Duelfer report," says no evidence was found that the deposed dictator's regime was producing such weapons after 1991.

Read more about the report and its findings here.

The report found that although the weapons stockpiles were destroyed, Saddam’s government was looking to begin a weapons-of-mass-destruction program again and didn't rule out the possibility that such weapons could have been transported to Syria or elsewhere for hiding.

"Every day there's a new fact coming out from this administration that directly contradicts what's coming out of the president's mouth," said Kerry spokeswoman Stephanie Cutter. "Clearly, things on the ground in Iraq are tumultuous and tenuous and without real action on the president's part, it looks like we're heading in the wrong direction."

Bush spoke on the report before leaving the White House on Thursday.

"Saddam Hussein was a unique threat, a sworn enemy of our country, a state sponsor of terror, operating in the world's most volatile region. In a world after September the 11th, he was a threat we had to confront. And America and the world are safer for our actions," the president said.

Kerry responded: "This week has proved definitive evidence as to why George Bush should not be elected president of the United States."

FOX News' Liza Porteus and J. Jennings Moss contributed to this report.