The US presidential race looked suddenly wide open on Tuesday after frontrunners Donald Trump and Hillary Clinton suffered chastening evenings in Iowa, the first step on the long road to the White House.

It was a particularly humbling experience for Trump, who cut a forlorn figure after Republican arch-rival Ted Cruz streaked to victory in the Iowa caucuses, staking his claim as the new standard bearer for the conservative camp going on to New Hampshire.

And if she was in any doubt before Iowa, former secretary of state Clinton now knows that she has a real fight on her hands in the shape of Bernie Sanders, after she saw off the self-proclaimed Democratic Socialist by the thinnest of margins.

The months-long presidential contest now kicks into high gear, with Democratic and Republican debates this week building up to next Tuesday's New Hampshire primaries.

Trump, the billionaire real-estate mogul and reality television star whose populist campaign turned conventional politics - and wisdom - on its head, also now faces a second genuine threat: from Marco Rubio, who chalked up more than 23% to Trump's 24% in the Iowa caucuses.

Surging past expectations, Cruz claimed victory with 27.7% of the vote, having invested heavily in campaigning in the deeply conservative state to outmanoeuvre his many rivals.

The showman Trump, 69, built his personal brand on the concept of winning and will need to prove he can turn a commanding lead in the New Hampshire polls into votes after failing to do so in Iowa.

Trump struggled to hide his disappointment on Monday night, saying he was "honoured" to finish second after being given no chance to win Iowa at the outset - before he began dominating the air waves, thanks partly to a series of controversial remarks on Muslims and immigration.

A second hiccup in New Hampshire could spell political disaster for the man who has never held elected office and has always maintained that being second was tantamount to being nowhere.

David Redlawsk, a professor at Rutgers University who was in Iowa for the caucuses, told AFP Trump was "the big loser" on the night.

That was in stark contrast to Cruz, whose campaign rolls into New Hampshire with renewed vigour.

Once reviled by fellow Republicans as a "wacko bird" eager to shut down the US government, Cruz proved with his Iowa win that his arch-conservatism may yet propel him into the White House.

Cruz, who has fought hard to maintain a prominent place for faith in American life, sees himself in a battle for the very soul of the US.

"To God be the glory!" exclaimed Cruz, after Iowans flocked to churches, school gymnasiums and libraries to be the first voices officially heard in the boisterous, tortuous nominating process that leads to Election Day on November 8.

"Tonight is a victory for courageous conservatives across Iowa and all across this great nation."

All to play for  

While Cruz is aiming to capitalise on his sudden momentum, Sanders returns to what can safely be described as his home turf in New Hampshire, with the potential to land a hammer blow against the former first lady Clinton and her dreams to be America's first female commander-in-chief.

Democratic party chair Andy McGuire called the results "the closest in Iowa Democratic caucus history" and that was borne out in the final tally, which did not filter through until Tuesday late morning.

With 100% of precincts reporting, Clinton took 49.8%, against 49.6 for the Vermont senator Sanders, her sole remaining challenger for the Democratic nomination.

Brian Fallon, Clinton campaign spokesman, admitted to CNN that Clinton, who lost out to President Barack Obama last time and has railed against Wall Street and money in politics, faces an emboldened Sanders in New Hampshire.

"There's no doubt that we go into this final week before New Hampshire slightly down (in the polls)," he said.

Experts say Clinton may be seeking to merely tread water for this next week, until the race shifts to South Carolina and Nevada, where she has commanding leads in the polls.

It was a gratifying night for 74-year-old Sanders, who has built a particular fanbase with young Americans on the left with his calls for "political revolution."

Clinton may have inched past him in Iowa, but Sanders, who has called for a more equitable society, was claiming a victory of another sort.

"We started our campaign 40, 50 points behind," he told CNN.

"I am proud of bringing a whole lot of young people into the political process that would revitalise American democracy. And if we're going to change America, that's what we've got to do."

As the frontrunning contenders hits the ground running in New Hampshire, they leave behind several candidates - Republican Mick Huckabee and Democrat Martin O'Malley - who announced they were giving up on the White House after being mauled in Iowa.