DES MOINES, Iowa -- Sen. John Kerry, who entered the Democratic presidential contest as the favorite, then faded in recent months, bounced back with an electrifying victory in the Iowa caucuses last night.

Fast-rising Sen. John Edwards finished a strong second, while former Vermont Gov. Howard Dean wound up well back in third place, a severe setback for the presumed national front-runner.

Missouri Rep. Richard A. Gephardt, the candidate with the most to lose in Iowa, ran a distant fourth.

"This didn't come out the way we wanted," a downbeat Gephardt told supporters, effectively ending his second presidential try. "Life will go on, because this campaign was never about me. It was about all of us."

The opening round of the 2004 presidential race turned the Democratic contest upside down and threw it wide open heading into next week's primary in New Hampshire, where Dean holds a dwindling lead in the polls.

"Thank you, Iowa, for making me the comeback Kerry!" said the winner, borrowing the "comeback kid" monicker that Bill Clinton used after managing to stave off defeat in the 1992 New Hampshire primary.

"Not so long ago, this campaign was written off. But ... you stood with me so that together we can take on George Bush and the special interests, and literally give back America its future and its soul," Kerry, 60, declared to jubilant supporters in Des Moines.

Kerry, whose White House ambitions appeared to be on life support only a few months ago, roared from behind in Iowa over the past three weeks. His campaign here ended with less than a whisper, though, after the candidate lost his voice during a grueling final campaign push and canceled several campaign events yesterday.

Edwards, the runner-up, told backers at his Iowa headquarters: "Tonight we started a movement to change this country that will sweep across America. This campaign, this cause, this movement ... is about lifting up the American people and making them believe again."

With 98 percent of the precincts reporting, Kerry led with 37.6 percent of the vote, followed by Edwards at 31.9 percent, Dean with 18 percent, Gephardt at 10.5 percent and Rep. Dennis Kucinich with 1.3 percent.

Kerry and Edwards had already been gaining in New Hampshire, even before the caucuses took place, as word of their Iowa surge spread over the past week. Along with Dean, they will now confront retired Gen. Wesley K. Clark and Sen. Joseph I. Lieberman of Connecticut, who skipped Iowa and concentrated instead on the Granite State.

In Iowa, it was a collapse in Dean's support as voters took a second look at the Vermonter in the final weeks of the campaign that made it possible for Kerry and Edwards to prevail.

Kerry, once the favorite in New Hampshire, may again be the man to beat there, after his big Iowa victory. But Clark, who has been laying the groundwork for his candidacy there, could also be formidable.

Edwards, who succeeded in putting a smiling face on Dean's angry, anti-Bush message, may also receive a huge lift heading into next week's primary.

"I really think Edwards is going to get the big bounce in New Hampshire," former Sen. Bob Dole, a Republican with first-hand experience in the ways of the first two presidential states, predicted last night on CNN.

Dean will face a severe challenge to reverse his downward momentum in New Hampshire in less than a week and demonstrate that he has learned from his Iowa setback.

The former Vermont governor, a victim of his own missteps, was defiant in the face of his poor showing here, which he blamed on the sustained attacks by his opponents.

"You know something? If you had told us one year ago that we were going to come in third in Iowa, we would have given anything for that," Dean told cheering backers here.

Then, shouting red-faced at the top of his lungs, Dean waved his fist and vowed that his campaign would continue through all the primary states.