"When he started, it was definitely a long shot," says a friend who was at the meeting. "Nobody there had any money. He's got this funny name. He's black. It wasn't even clear at that stage if he would even get the African-American vote."

And now? At a rally at the Washington Hilton, where all the Democratic hopefuls, including Hillary Clinton, are making their pitch, Obama takes the stage in the full glare of the nation's media as a leading contender for the party's presidential nomination. Just the mention of his name commands a standing ovation. When he appears - reed thin and upright, one huge grin and two big ears - they roar. From the beginning of his short speech, the audience is his. When he pauses there's silence; when his voice rises they come to their feet. His chosen enemy is not the Republicans or his Democratic opponents, but cynicism. "We have to move away from this 'can't do, won't do, won't even try' kind of politics," he says. "Some of us don't even believe we can transform this country."

"You can, you can," shouts one woman in the audience. But can he?

Obama's ascent has been little short of miraculous. Six months into the Iraq war, here was a candidate whose middle name was "Hussein" and whose surname rhymed with "Osama". Obama persevered. He referred to himself as "the skinny kid with the funny name". He joked with the young: "My name is Obama, not Yo Mama."

He took Illinois with one of the largest landslides in the country to become the Senate's only black member. Today, as Obama, now 45, announces his candidacy for the presidency, his is a household name. Some polls have him neck and neck with Hillary Clinton and beating every Republican hopeful in a head-to-head run-off. George Clooney calls him a friend. Halle Berry has said she would "collect paper cups off the ground to make his pathway clear". Billionaire liberal George Soros is in his corner.

Back in November, just as the Democrats were poised to win the midterm congressional elections, Obama was simultaneously on the front covers of Time, Harper's and Men's Vogue, as well as the subject of four op-ed columns in the New York Times in five days - the more surprising given that he wasn't even standing. His latest book, The Audacity Of Hope, was the Amazon bestseller over Christmas. This month, he and his wife, Michelle Robinson, are on the cover of Ebony magazine with the headline America's Next First Couple.

In a nation where celebrities become politicians, here is one man who has flipped the script. Ahead of the 2004 presidential election, Michael Moore advocated drafting talkshow supremo Oprah Winfrey. "She's got good politics, a good heart, and she'd have us all up at six in the morning jazzercising!" This time around, Oprah has endorsed Obama. When asked last year for her views on running for the White House, Oprah said, "You know what I would say to him? I would say, 'Take your energy and put it in Barack Obama.' "

The road from Obama's small gathering in Chicago to his current national status has been paved as much by others' bad luck as his own good judgment. Perhaps worryingly for Ms Clinton, most of his opponents' pitfalls have involved marital difficulties.

In the Democratic primary, he was trailing behind a much better funded candidate, Blair Hull, when his opponent's campaign imploded after unsealed divorce papers alleged that Hull had struck his ex-wife and threatened to kill her - Obama romped home. His Republican challenger, Jack Ryan, then dropped out after more divorce papers revealed that Ryan had tried to force his ex-wife to go to sex clubs and allow others to watch them have sex - four months before polling day, Obama was standing for an open Senate seat with no opponent. The eccentric African-American religious zealot Alan Keyes stepped forward with a campaign ill-suited for Illinois. Obama was home and dry.

Obama's own past is not free of bad behaviour, however. In 1995 he wrote a memoir, Dreams From My Father, that had many candid moments, including the confession that, as a disaffected teenager, he had smoked marijuana and taken cocaine. "I had learned not to care," he wrote. "Pot had helped, and booze; maybe a little blow when you could afford it."

Obama inhaled; but you heard it from him first. He met and married Michelle Robinson, a fellow attorney at a corporate law firm, back in the late 80s, and they have two daughters.

Obama's finest hour came when he addressed the Democratic party convention in August 2004. In a week full of speeches, his stood out. Even once you had extracted the obligatory motherhood, apple pie and patriotism, it still had meaning. Once he had genuflected before the trinity of Bible, constitution and the Statue of Liberty, it remained compelling.

"If there is a child on the south side of Chicago who can't read, that matters to me, even if it's not my child," he said, gathering rhetorical pace. "If there's a senior citizen somewhere who can't pay for their prescription drugs and has to choose between medicine and the rent, that makes my life poorer, even if it's not my grandparent. If there's an Arab-American family being rounded up without benefit of an attorney or due process, that threatens my civil liberties."

The oratory was impressive, but it was the conviction that made it truly rare. Older women, black and white, stood and bit their bottom lips while he spoke. Young men punched the air when he had finished.

The day after his speech, the headlines twinkled with a constellation of astronomical clichés. A Star Is Born (Boston Globe and the Christian Science Monitor); New Star Emerges On Democratic Scene (New Orleans Times-Picayune); Rising Star Brings Democrats To Their Feet (USA Today). The transcript of the speech was appended to Dreams From My Father, earning Obama a Grammy award for best spoken-word album for the audio book edition. The line between politician and celebrity was becoming blurred. "I never saw this coming," says Salim Muwakkil, an editor for the political monthly In These Times, who has followed Obama's career for more than a decade. "Don't get me wrong. I think he's good. But I don't think anyone, including him, anticipated this level of obsession or support."

The response to that speech, and to almost everything that has happened around him since then, tells us as much about America as it does about Obama. The country is embroiled in a war from which it apparently cannot escape, intensely mistrustful of the political class that enabled it and deeply divided along partisan lines; the forward-looking optimism that once characterised its national mood is dissipating. A staggering 46% of Americans believe the country's best days have already come and gone, against 38% who believe they are yet to come - the most pessimistic results ever, say pollsters at Rasmussen. A Pew survey in 2004 revealed that the percentage of Americans who believe that the US is less respected than it used to be has almost doubled over the past 20 years and now stands at 67%. In George Bush, there is buyer's remorse: the president's approval ratings languish in the low 30s; 58% say they wish his presidency would simply end. In short, America is in a deep funk and desperate for political leadership that can unite the country around some new story.

Obama's campaign is pitched to fill that void. The name of his political action committee is Hopefund; the chant that greets him at George Mason University in Virginia, where he was speaking on Friday of last week, is "Yes, we can" - it's becoming a theme. "He makes me feel like it's possible," says 17-year-old Anita Nankan, who plans to cast her first vote for Obama. The student rally was organised through Students For Barack Obama and the online networking site Facebook.com. When Obama reached the stage it turned out he had never met the organisers of either the site or the student leaders. This is a good omen for him - a sign that his campaign may enjoy grassroots support, mixing youthful energy with the galvanising and fundraising potential of the web.

"The stakes are too great to let the cynics win this time," he tells a Democratic audience in DC that same day. "This is our time. It's time for us to stop settling for the world as it is and start re-imagining the world as it might be. We've had a lot of plans, but what we've also had is a shortage of hope."

The story he aims to sell is one of principle and bipartisanship - a man prepared to take on his detractors when he has to and work with them when he can. Unlike most of his presidential challengers, he was a vocal critic of the Iraq war before it started, at a time when such a stance was less than popular.

Muwakkil recalls in particular a meeting at Catfish Corner on the west side of Chicago, when some young men were heckling Obama during his senatorial campaign. "These were some hard-core brothers," he says. "A lot are former inmates who feel that nobody's looking out for them. They heckle Jesse [Jackson]. They heckle everybody. But Obama took them on and won them over. He was respectful to them, but he was forceful in what he was saying and he calmed the waters. I was really impressed by that."

In state-wide politics, Obama had acquired a reputation as a legislator who gets things done without rancour. He introduced a law on racial profiling and another on healthcare for children.

His record since he has been in the Senate has been more chequered. He voted to confirm Condoleezza Rice as secretary of state and, more curiously, backed Senator Joseph Lieberman, a strident supporter of the war, in a tight primary race in Connecticut against an antiwar candidate, Ned Lamont. Obama claimed it was loyalty for the friendship Lieberman had shown him during his first years in the Senate.

Still, his congressional voting record has earned him high marks from progressive organisations, including conservationists and civil rights campaigners. He was one of just 19 Senators to vote against the confirmation of both of George Bush's selections to the Supreme Court. Most boldly, last month Obama introduced a bill aiming to reverse Bush's troop surge, and start withdrawing the US military from Iraq from May 2007, with all combat brigades to be removed from the country by March 31 next year. "Our troops have performed brilliantly in Iraq," Obama said, "but no amount of American soldiers can solve the political differences at the heart of somebody else's civil war. That's why I have introduced a plan to not only stop the escalation of this war, but begin a phased redeployment that can pressure the Iraqis to finally reach a political settlement and reduce the violence."

To some, Obama not only provides a new narrative for a nation at war with the world and at war with itself - he personifies it. His father was a Kenyan student in Hawaii on a scholarship when he met his mother, whose parents were from Kansas. It was the late 50s, and mixed-race relationships were still illegal in some states. While Obama was a toddler, his father returned to Kenya. His mother met an Indonesian man, a Muslim called Lolo, and took Obama to Indonesia, where he attended a local school. When his mother's relationship with Lolo ended, Obama returned to Hawaii to live with his grandparents. His studies took him to Occidental College in California and then to Columbia in New York, before he arrived in Chicago to do grassroots work with churches. After three years as a local organiser, he was admitted to Harvard law school, where he gained national attention after becoming the first black American to be elected president of the Law Review. On graduation, he returned to Chicago, where he worked for a civil rights law firm and taught at the University of Chicago.

It is an American story simultaneously as atypical and as accessible as you can get. Almost every strand of the American experience is there: the immigrant, the midwest, the black childhood, the white parents, the Christian educated in a Muslim country, the Ivy League experience for a boy from a working-class family. "With his multi-ethnic family and his globe-spanning childhood, there is a little piece of everything in Obama," gushed the conservative New York Times columnist David Brooks. If you are worried about America's bipolar political culture, its inability to communicate with the other nations and cultures abroad, or its embittered racial divide at home, Obama's your man.

In the minds of many, in fact, Obama is both an advocate for a unifying approach to foreign policy and national politics, and an embodiment of it.

In an edition of Hardball, an influential political cable television show, the host Chris Matthews tried to get to the heart of Obama's appeal. "I don't think you can find a better opening gate, starting gate personality than Obama as a black candidate," he said. "I can't think of a better one. No history of Jim Crow, no history of anger, no history of slavery. All the bad stuff in our history ain't there with this guy."

Few people who know and support Obama will deny that one of his abiding political strengths as a presidential candidate is that he does not scare white people. "White people like dealing with him because he doesn't make them feel guilty," said one white friend who has known Obama for years. "I don't think he goes out of his way to do that, but the fact that he does helps a lot."

Describing the crowd's reaction to him in Rockford, Illinois, Time's Joe Klein noted: "The African-Americans tend to be fairly reserved... The white people, by contrast, are out of control." Klein ranked Obama alongside Colin Powell, Tiger Woods, Oprah Winfrey and Michael Jordan as "black people who... seem to have an iconic power over the American imagination because they transcend racial stereotypes." In other words, Obama does not make white people feel too white, or at least feel too bad about being white.

It is not difficult to see why these attributes would be appealing. In a country where one in three black boys born in 2001 is likely to go to jail and where whites are five times more likely than blacks to believe that racism played no role in the post-Hurricane Katrina debacle in New Orleans, a post-racial candidate is a far more attractive option than actually tackling racism. "We would love to move beyond race," says Ron Walters, director of the African American Leadership Institute and an expert on black presidential politics, "but we don't control the racial prism that regulates our lives."

Fellow Democratic presidential hopeful Joe Biden last week described Obama as "the first mainstream African-American who is articulate and bright and clean and a nice-looking guy". He later called Obama to apologise after which Obama said: "I didn't take Senator Biden's comments personally, but obviously they were historically inaccurate."

There are two key reasons why Obama's candidacy is credible in a country where roughly one in five people say they would not vote for a black presidential candidate. First, he is not African-American. As Matthews pointed out, Obama brings to the table no personal tales of southern sharecropping or ritual humiliation. Back in 1988, when he almost secured the Democratic nomination, Jesse Jackson said, "They wonder why does Jesse run, because they see me running for the White House. They don't see the house I'm running from. I have a story... I wasn't born in the hospital. Mama didn't have insurance. Born in a three-room house [in South Carolina], bathroom in the backyard, slop jar by the bed, no hot and cold running water... Wallpaper used for decoration? No. For a windbreaker." Obama has a story, too, but with his white Kansan grandparents in Hawaii, his childhood home was quite different.

Second, he represents a new generation of black leadership that was not forged in the heat of the civil rights era. He was two when Martin Luther King made his "I have a dream" speech at the March on Washington. Before his seventh birthday, both King and Malcolm X had been assassinated. Unlike Jesse Jackson, who appeared on television smeared in King's blood, or Condoleezza Rice, who knew one of the girls murdered when a Klansman bombed the 16th Street Baptist church in Birmingham, Alabama, Obama knows those years and places only from the history books.

Unlike most other postwar black leaders - King, Jackson, Al Sharpton, Malcolm X, Louis Farrakhan - Obama did not rise through religion or the church. As the only institution where blacks were allowed to organise autonomously, the church became the primary political institution for black America. But as more opportunities have opened up, others are emerging through the military, academia and business. The podium and pulpit for him are no longer interchangeable in black American politics. And with the end of that era goes what African-American intellectual Manning Marable has termed the "black messianic" style of speech and organising.

Obama's style would not work well in a southern Baptist church. There are no rhymes with reason followed by a call and response. On stage his manner is more deliberate - at times even plodding. During his 25-minute speech at George Mason University, he tells a long story about a small town in southern Illinois with a racist reputation where he received a warm welcome when running for Senate. There is no punch line; its central point is that things can change. But just when you thought he'd lost the audience there comes a flash of rhetorical brilliance, reminiscent of his speech at the 2004 convention, that sends the 1,000-plus crowd, packing three storeys of an atrium area, into a frenzy.

"The ark of history is long," he says, quoting Martin Luther King, "but it bends towards justice. But it doesn't bend on its own," Obama continues. "It bends because you decide we shouldn't live in a country where the poor do not have healthcare." Big cheer. "It bends because you decide everybody deserves an education even if they're not wealthy." Bigger cheer. "It bends because you decide we don't want to be feared in the world, we want to be respected." And the atrium echoes to a deafening roar.

It's not just the style that is new. "The civil rights generation saw politics as the next step in the struggle for civil rights," Muwakkil says. "Their aim was to get their agenda taken up by whoever won. But this new generation do not conceive politics as the next step, but just as what it is - politics. Their aim is to win."

But these are early days yet. Obama's appeal among white Americans may prove to be as shallow as it is broad. Come polling day, he may yet encounter the "Wilder effect", named after the African-American governor of Virginia, Doug Wilder. Wilder was leading by double digits in the polls in the run-up to the election in 1989, but when the votes were counted he just edged in by a hair. The discrepancy was put down to white voters who said they would back him but, once the curtain was pulled, just could not bring themselves to vote for a black candidate.

Indeed, the very things that make Obama viable also make him vulnerable. Recently, a rightwing magazine claimed that the school he attended in Indonesia was a madrasa - it wasn't. But Rupert Murdoch's Fox News repeated the claim consistently. "Maybe he doesn't consider terrorists the enemy," one caller said. Fox anchor Brian Kilmeade responded, "Well, we'll see about that."

Meanwhile, the very thing that has made Obama attractive to whites has made African-Americans somewhat wary. According to two recent polls, black Democrats prefer Hillary Clinton by three to one over Obama, and four in five give her a favourable rating as opposed to one in two for Obama. "There are some things you can't run away from," Walters says. "He's going to have to raise between $50m and $100m, and that money's not coming from black people. So black people are going to have to engage with that reality. He gives the impression that he dances on both sides, but when he gets into the goldfish bowl of an election campaign, he will be forced to define himself more concretely."

And once the race heats up, the issue of race will heat up, too. "The Icon gets hoisted," David Axelrod, Obama's political consultant, told The Nation recently. "And then it becomes a piñata."