By John Whitesides, Political Correspondent

DES MOINES, Iowa (Reuters) - Democrat Barack Obama surged to a four-point lead over John Edwards in Iowa, with Hillary Clinton fading to third just hours before the first presidential nominating contest, according to a Reuters/C-SPAN/Zogby poll released on Thursday.

Obama and Edwards gained ground overnight in the tracking poll, and Clinton fell four points to third place -- a finish that, if it held, would deal a dramatic setback to the one-time Democratic front-runner.

Obama was at 31 percent among likely Democratic caucus-goers, Edwards at 27 percent and Clinton 24 percent. No other Democrat was in double digits.

In the Republican race, Mike Huckabee expanded his lead to six points, 31 to 25 percent, over former Massachusetts Gov. Mitt Romney, the one-time leader in Iowa who has attacked Huckabee for his record as Arkansas governor.

Former Tennessee Sen. Fred Thompson is in third place in the Republican race at 11 percent and Arizona Sen. John McCain slipped two points to 10 percent. Texas Rep. Ron Paul also registered 10 percent.

"There is a clear Clinton fade," pollster John Zogby said. "None of it has been dramatic, but it has been steady."

He said Clinton, a New York senator, was losing ground to Obama, an Illinois senator, among Democrats -- as opposed to independents -- and self-described liberals.

"Under any circumstance, a 31-27-24 spread is still very close," he said of the margins for the top three Democratic contenders. "Edwards is right in the mix and he has made gains too."