Obama, Clinton near end of historic Democratic race

WASHINGTON (Reuters) - Barack Obama edged closer to capturing the Democratic presidential nomination on Tuesday amid a flurry of speculation that Hillary Clinton will quickly drop her White House bid.

The Clinton campaign quickly denied a report by The Associated Press that the New York senator would say on Tuesday night that Obama has the delegates to secure the Democratic nomination.

"The AP story is incorrect. Senator Clinton will not concede the nomination this evening," the campaign said in a statement issued just minutes after the report was issued.

Clinton campaign chairman Terry McAuliffe told CNN Clinton was "absolutely not" conceding the campaign and said the AP report was completely incorrect.

"We've got to spend the next three days... working the superdelegates to convince them a) Hillary got more votes than anyone else and b) she is the best one to take on John McCain in the fall," he said.

With 31 delegates to the Democrats' August convention at stake, Democrats in South Dakota and Montana cast the final votes on Tuesday in the five-month state-by-state battle for the right to face Republican John McCain in November's presidential election.

Obama needs fewer than 40 delegates to reach the 2,118 required to capture the nomination and become the first black presidential nominee of a major U.S. political party.

The Illinois senator could hit that number as soon as Tuesday night depending on how quickly he wins commitments from nearly 200 uncommitted superdelegates -- party officials who are free to back any candidate.

He secured one key endorsement on Tuesday from U.S. Rep. James Clyburn of South Carolina, the third-ranking Democrat in the U.S. House of Representatives and the top-ranking black member of Congress.

"Today the process ends," Clyburn told NBC's "Today" show.

He urged other superdelegates to follow his lead and announce their support on Tuesday so the Democratic Party could have a clear nominee by the end of the day. A number of other superdelegates began throwing their support behind Obama.

Voting ends in South Dakota at 7 p.m. MDT/9 p.m. EDT (0100 GMT), and in Montana an hour later, with results expected shortly after.

The polls opened amid growing speculation about when Clinton would drop out of the race and end the grueling, historic battle for the Democratic nomination.