Democrat Hillary Clinton and Republican Mitt Romney won the Nevada caucuses on Saturday in the latest contest to represent each party ahead this year's US presidential elections.

With 97 per cent of caucus sites reporting, Clinton led the Democratic vote with 51 per cent over chief rival and fellow senator Barack Obama, who had 45 per cent of the vote, the western state's Democratic Party said. John Edwards was in a distant third with 4 per cent.

Mitt Romney had secured 51 per cent of the Republican vote, with 99 per cent of caucus sites reporting their results. Ron Paul - who has generated a small, but loyal following for his hands-off economic policies and opposition to the war in Iraq - was in second place with 14 per cent of the vote, followed closely by Arizona Senator John McCain with 13 per cent, according to numbers reported by the state's Republican Party.

Analysts thought the battle could come down to a fight between the public employee union that supports Clinton,60, and casino and the restaurant union workers that endorses Obama, 46.

However, caucus goers at the casino sites did not appear to follow the union's lead, with Clinton winning at seven of the nine meetings on the Las Vegas Strip, the Las Vegas Sun newspaper reported online.

Broadcast images of those gathering for a caucus in a casino showed many workers in their uniforms shouting the names of their favoured candidates. Clinton supporters held signs that said, "I support my union. I support Hillary," in an indication that many voters did not follow their union's endorsement when choosing a candidate.

In Las Vegas many members of the Culinary Workers Union were eligible to attend special caucus sites in the casinos that line the famed Strip, and Clinton supporters had argued against it in a failed legal challenge ahead of the vote.

The judge agreed that opening the casino ballrooms for the caucuses meant more people who work in the state's largest industry could participate in the democratic process.

Clinton supporters disagreed, saying the location would skew the vote since voters don't cast secret ballots in a caucus but rather stand in groups around the room for the candidate of their choice. Since the casino unions were backing Obama, Clinton supporters said those workers would be subject to undue pressure from union leaders.

"I think that the people of Nevada, they want somebody who's going to give them solutions, not just rhetoric," Clinton said after her victory. "They want to hear what it is you're going to do, and I have been very specific about my plans, because I want to be held accountable."

The response of Hispanic voters in the state was being closely watched ahead of upcoming contests in California, New York and New Jersey, which also have large Hispanic populations.

On the Republican side, Romney, 60, campaigned hard in the western state, counting on his appeal to Mormon voters. Romney won the Michigan primary Tuesday and leads the candidates in the number of delegates to the Republican nominating convention in September, when the party will officially chose its candidate.

"If you can win those two states, Michigan and Nevada, it would mean you'd put together quite a coalition and have been able to make the kind of inroads you have to make to take the White House," he said of his victory.

The focus later on Saturday will shift to the centre-right Republicans in South Carolina, the first southern state in the state- by-state battle for delegates to national political conventions in August and September.

With plummeting employment rates, the home mortgage crisis and drooping construction figures, voters in both South Carolina and Nevada named the economy as their number one issue in the vote, media reports said.

In South Carolina, where only Republicans are casting votes Saturday, Senator McCain, 71, was the slight favourite with up to 28 per cent support in pre-election polling, but former Arkansas governor Mike Huckabee, 52, was breathing down his neck with his strong appeal to southern and Christian voters. Romney was running a definite third in pre-election polling.

Each Republican has won a primary prize - Huckabee took Iowa, McCain New Hampshire and Romney his native state of Michigan in presidential preference votes earlier this month.

Democratic voters in South Carolina will chose their preferred presidential candidate next Saturday, January 26, where the scramble for the large black vote has been intense between Clinton and Obama. Edwards, a son of the South, could also give them a chase for their money.

Given the closeness of the races, the presidential hopefuls need the single-state contests like South Carolina and Nevada to build momentum going into the huge multi-state vote on February 5. Twenty- three states will be holding presidential nominating contests on that day.

In between is the Florida vote on January 29, where former New York mayor Rudy Giuliani, who has lagged fifth and sixth in the contests so far, is placing all his hopes and money.

The state contests elect delegates to the national conventions later this year. Democrats are to gather in August in Denver, Colorado while Republicans will gather in St Paul, Minnesota.

The presidential elections are November 4.