Mrs Clinton and Senator Obama (above) are in a hard fight for the Democratic nomination to face Republican John McCain in November's presidential election. -- PHOTO: AFP

Mrs Clinton, campaigning in Pittsburgh, proposed a package of tax incentives to keep jobs in the United States as the two Democrats focused on the economy ahead of their next showdown, in Pennsylvania on April 22.

Senator Obama, speaking to a Pennsylvania AFL-CIO convention one day after Clinton, said the New York senator was too closely tied to corporate lobbyists to bring real change to a Washington that serves the interests of the powerful.

'Over the last seven years, we've had an administration that serves the interests of the wealthy and the well-connected, no matter what the cost to working families and to our economy,' the Illinois senator said.

'I'm the only candidate in this race who's actually worked to take power away from lobbyists by passing historic ethics reforms in Illinois and in the US Senate. And I'm the only candidate who isn't taking a dime from Washington lobbyists,' he said.

Mrs Clinton hosted a jobs summit where she proposed US$7 billion (S$9.7 billion) a year in new tax benefits and investments for companies that create US jobs. She also called for US$500 million annually in investments that encourage creation of high-wage jobs in clean energy technologies.

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'I believe our government should get out of the business of rewarding companies for shipping jobs overseas, and get back into the business of rewarding companies that create good, high-wage jobs - with good benefits - right here in America,' Mrs Clinton said.

Mrs Clinton and Senator Obama are in a hard fight for the Democratic nomination to face Republican John McCain in November's presidential election. Their next contest is in Pennsylvania, which has been hard-hit by manufacturing job losses and economic turmoil.

Polls show Mrs Clinton holds a solid but shrinking lead over Senator Obama in the state. A Quinnipiac University poll showed her with a 9-point lead on Senator Obama in Pennsylvania, down from a 16-point lead a month ago. Some other polls show the state race even tighter.

Both candidates have focused on Mr McCain in recent days, and Mrs Clinton released an ad casting doubt on the Arizona senator's ability to handle the economy.

Economy as battleground
Similar to an ad she used in Ohio and Texas to challenge Senator Obama's capability as commander in chief, it features sleeping children and a ringing telephone, and asks if Mr McCain is ready to deal with an urgent economic crisis.

'John McCain just said the government shouldn't take any real action on the housing crisis, he'd let the phone keep ringing,' the narrator says.

McCain campaign spokesman Tucker Bounds said Americans could not afford the Democrats' 'liberal agenda' on the economy.

'John McCain is ready to lead with a pro-growth economic plan to lower taxes, cut government spending, empower America's entrepreneurs and get our economy back on track,' Mr Bounds said.

During his Philadelphia appearance, Senator Obama took a poke at Mrs Clinton's recent efforts to compare herself to Rocky Balboa, the underdog boxer featured in the 'Rocky' movies.

'We all love Rocky, but Rocky was fiction. And so is the idea that someone can fight for working people and at the same time embrace the broken system in Washington, where corporate lobbyists use their clout to shape laws to their liking,' Senator Obama said.

He picked up the endorsement on Wednesday of Lee Hamilton, a former Indiana congressman and an influential voice on foreign relations. Mr Hamilton co-chaired two blue-ribbon commissions that investigated the Sept 11 attacks and advised President George W. Bush on the war in Iraq.

His support bolsters the first-term senator against criticism he is too green to be commander in chief. Mr McCain assailed Senator Obama's foreign policy credentials on Wednesday.

'I know he's inexperienced and I know he's got a lack of knowledge' about national security, Mr McCain told reporters.

r McCain, a former Navy fighter pilot who is on a week-long tour to highlight his life story and military background, visited the Naval Academy, where he graduated fifth from the bottom of his class.

He said he has begun compiling a list of names of potential vice presidential running mates. 'I'd like to get it done as early as possible,' Mr McCain said.

In the Democratic race, Senator Obama leads Mrs Clinton in pledged delegates who will help choose the nominee at the August party convention, but neither is likely to win enough delegates in state contests to clinch the nomination.

That is likely to leave the decision up to nearly 800 superdelegates - elected officials and party insiders who are free to back any candidate.

Senator Obama won over another superdelegate on Wednesday with the endorsement of Wyoming Governor Dave Freudenthal. -- REUTERS