US Presidential race: Cruz beats Trump in Iowa caucus

SENATOR Ted Cruz has beaten billionaire Donald Trump in Iowa's presidential nominating contest, dealing a big upset to the national front-runner in the race to be the Republican Party's White House nominee this year.

Mr Cruz, a conservative Texas senator, won with 28 per cent of the vote compared to 24 per cent for businessman Trump, according to MSNBC.

Marco Rubio, a Florida senator, came in third place with 23 per cent, making him easily the leader among establishment candidates.

Meanwhile in the Democratic vote, former secretary of state Hillary Clinton held a lead of 51.6 per cent compared to 47.8 per cent for Bernie Sanders, a self-styled democratic socialist US senator from Vermont, with 38 per cent of the precincts reporting.

"What a bit of history we are seeing," Mr Cruz told his fired-up supporters.

Read more at the ABC.