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Barack Obama and John McCain tiptoed around each other on the issue of the Wall Street bailout, while having at it over Iraq, in last night's pivotal first televised debate in the presidential election.

In the shadow of an unprecedented financial crisis, the Democratic and Republican candidates confronted the causes and proposed solutions to the threatened collapse of the financial services sector.

For Mr. Obama, “this is a final verdict on eight years of failed economic policies prompted by George Bush, supported by Senator McCain.”

Mr. McCain half agreed. Burnishing his credentials as a conservative maverick, the Arizona senator at first spent almost as much time criticizing George W. Bush's administration as did Mr. Obama.

“We Republicans came to power to change government, and government changed us,” he declared. As the evening progressed, Mr. McCain proved he was not reluctant to make jabs of his own, accusing Mr. Obama of requesting more than $800-million in so-called earmarks, special spending projects for his state of Illinois.

When Mr. Obama replied that he had frozen all earmark requests, Mr. McCain shot back: “Senator Obama suspended those requests for pork-barrel projects after he was running for president of the United States. He didn't happen to see that light during his first three years as a member of the United States Senate,” he rebutted. As the two men debated economic policy, it became clear that neither was willing to risk a truly sharp, one-on-one series of attacks and counterattacks.

Instead, they compared and contrasted their tax and spending policies.

Body language was also part of the story. Prompted by moderator Jim Lehrer, Mr. Obama increasing addressed Mr. McCain directly, while Mr. McCain preferred to address his questions to Mr. Obama through Mr. Lehrer.

One example: Mr. McCain accused Mr. Obama of shifting his position on taxes. “Senator Obama has shifted on a number of occasions. He has voted in the United States Senate to increase taxes on people who make as low as $42,000 a year.” Mr. McCain accused.

“That's not true, John, … it's just not true,” Mr. Obama replied. Both candidates largely agreed that they supported, in principle, the $700-billion rescue package put forward by Treasury Secretary Henry Paulson, provided that the right changes were made to it.

Both acknowledged that the next president would have to cut spending in order to cut the escalating deficit and pay the costs of the Wall Street rescue package.

And Mr. Obama drew a smile from Mr. McCain when he said: “John mentioned me being wildly Liberal. Mostly that's just me opposing George Bush's wrong-headed policies.”

To help pay the costs of the Wall Street rescue, Mr. McCain proposed a blanket spending freeze on most government programs outside defence and social services, which Mr. Obama decried as “using a hatchet where you need a scalpel.”

He acknowledged, however, that the looming recession and financial crisis would affect his election promises. “There is no doubt it is going to affect our budgets,” Mr. Obama said, “there's no doubt as president I'm going to have to make some tough decisions.”

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Both candidates had a shared goal: to persuade undecided voters – especially those crucial lower-income undecided voters in the key swing states of the upper Midwest – that they understood their fears over the cascade of failures in the financial sector; their impatience with Washington gridlock and their concern over the fragility of America's national security and its diminished place in the world.

Yet each also had different goals: for Mr. Obama it was to maximize voter concerns about Mr. McCain's shaky grasp of economic issues, while minimizing concerns about his own thin resumé on foreign policy, while Mr. McCain sought to do exactly the opposite.

The sharpest clashes, not surprisingly, centred on the Iraq war. Mr. Obama opposed it; Mr. McCain supported it. Mr. Obama, on the other hand, opposed the successful surge in troop levels, which Mr. McCain championed long before the administration was ready to oblige.

“Senator Obama refuses to acknowledge that we are winning in Iraq,” Mr. McCain accused. As for whether the war should have been waged in the first place, “The next president is not going to have to address the issue of whether we [should have gone] into Iraq or not. The next president of the United States is going to have to decide how we leave, when we leave, and what we leave behind.

“John, you like to pretend like the war started in 2007, when the surge began, Mr. Obama countered. “The war started in 2003… you said it was going to be quick and easy, you said we knew where the weapons of mass destruction were. You were wrong. You said that we were going to be greeted as liberators. You were wrong.”

Mr. McCain accused Mr. Obama of making rash statements that revealed a lack of foreign policy gravitas, while Mr. Obama rebutted that it was Mr. McCain who had cavalierly talked about bombing North Korea or Iran.

It appeared that on many of the foreign policy issues, especially Iraq, Mr. McCain dominated the debate, leaving Mr. Obama occasionally frowning in exasperation.

Mr. Obama, however, managed to curtail the rambling, academic debating style on display in previous debates, while Mr. McCain had to rein in his notorious hot-headedness and avoid a certain kind of spectral grin he sometimes flashes that can look dreadful on camera.

The financial crisis, and Congress's efforts to deal with it, brought both candidates to Washington, Thursday, reducing time for preparation, though this did not appear to put either of them off his game.

The first presidential debate is one of the most important nights in a U.S. election campaign. In 1960, in the race between John F. Kennedy and Richard Nixon, and 1980, in that between Ronald Reagan and Jimmy Carter, the televised debate arguably decided the outcome.

Yet in some respects, last night's contest felt anticlimactic. In a campaign that has already witnessed hurricanes Gustav and Sarah Palin, with banks going belly-up weekly and with Congress struggling to approve a $700-billion rescue of Wall Street, 90 minutes of discussion about (mostly) foreign policy and national security between the two men hardly seemed the most defining moment of the month.

Nonetheless, with a Super Bowl-sized audience tuning in, the debate offered voters a direct, unfiltered look at the two candidates under pressure, both from moderator Jim Lehrer and from each other, and each tried to make the most of it.

From Kosovo to Georgia to North Korea, Mr. McCain sought to demonstrate his great depth of knowledge in matters of foreign policy, while accusing Mr. Obama of “a little bit of naivete,” and saying, “I honestly don't believe that Senator Obama has the knowledge and experience” to guide American foreign policy.

The question of whether the American president should talk with foreign leaders of hostile states prompted one of the sharpest exchanges, with Mr. Obama claiming that Mr. McCain's own foreign policy adviser, former secretary of state Henry Kissinger, supported the idea.

“So let me get this right. We sit down with [Iranian President] Mahmoud Ahmadinejad and he says ‘We're going to wipe Israel off the face of the earth,' and we say, ‘No, you're not?' Oh please.” It prompted the one time in the evening when the two candidates talked over each other. The debate capped a week of unparallel political drama, as Mr. McCain injected himself into the negotiations over the Bush administration's proposed rescue package.

It's difficult to know what Mr. McCain wanted voters to take away from his actions over the past three days. In the midst of a financial and congressional crisis, he suspended his campaign on Wednesday, urged that last night's debate be cancelled, and flew to Washington to help negotiate a deal.

He failed to get that deal. (The Democratic claim that his arrival actually torpedoed an emerging agreement is probably just so much spin.) Yesterday, having not accomplished anything that he set to do in Washington, he decided to debate anyway and flew to Mississippi.

Country first? Or first impulse? Over the past two or three months, a pattern has emerged. The electoral scales appear to be weighted in Mr. Obama's favour, by perhaps about three percentage points. There are more registered Democrats, now, than Republicans, women appear to be trending in favour of the Democrats, and Mr. Obama has a lock on the African American and youth vote, and a sizable advantage among Latino voters.

Mr. Obama's coalition is just a bit bigger than Mr. McCain's coalition of economic, social and foreign-policy conservatives, combined with conservative independents who have doubts about Mr. Obama's lack of experience, his liberal voting record and, for some, his race. All things being equal, it's advantage Obama.

To overcome that entrenched Democratic advantage, Mr. McCain keeps jumping on the scales. In August, after Mr. Obama's triumphal overseas tour, the Republicans released ads mocking Mr. Obama as the world's most famous celebrity. The scales evened out.

When they began to tip toward Mr. Obama again, after the Democrat's successful, high-voltage convention, Mr. McCain announced Ms. Palin as his vice-presidential candidate, giving him a jolt of support, especially among women voters.

When the financial crisis once again weighted the scales in Mr. Obama's favour, Mr. McCain suspended his campaign, tried to get last night's debate cancelled, and returned to Washington.

Mr. Obama, in response, has resolved not to let Mr. McCain force him off his game. Cool Mr. Obama carries on with his campaign, introducing himself to voters, stressing a platform of middle-class tax cuts and education and health-care reform and pushing Mr. McCain to defend states, such as Indiana, that Republicans would normally consider safely in their column.

Whether Mr. McCain's tactical approach of sudden, surprise offensives, or Mr. Obama's strategic decision to largely ignore these assaults, appeals most to voters will be known in a little more than five weeks.

Much sooner than that, we will have a sense of how viewers and voters judged the two candidates' performance in last night's contest.