STORM LAKE/OELWEIN, Iowa (Reuters) - As Joe Biden on Saturday finished an eight-day bus tour through the crucial early nominating state of Iowa, one realization loomed large: His biggest challenge to clinching the Democratic presidential nomination may be coming from Pete Buttigieg, a Midwest mayor less than half his age.

FILE PHOTO: Democratic 2020 U.S. presidential candidate and former U.S. Vice President Joe Biden speaks during his "No Malarkey!" campaign bus tour event at the Ross Reid American Legion 9 in Oelwein, Iowa, U.S., December 7, 2019. REUTERS/Shannon Stapleton/File Photo

Leading in national polls among Democrats but trailing in Iowa, where progressive Senators Elizabeth Warren and Bernie Sanders have won over more liberal, urban and younger Iowans with their fight-the-power messages, Biden, 77, is targeting the state’s older, moderate and rural voters.

But Buttigieg, 37, is making inroads with those same people, interviews with Iowa Democrats and polling data showed. He has carved out a lead in Iowa, with Sanders, Warren and Biden jockeying for second place, according to recent statewide polls.

In his most aggressive campaigning yet in the Midwestern state, Biden, the former vice president, traveled from small town to small town over the past week with a pitch that the United States needs to return to old-fashioned values.

“You were raised to treat people with respect. You were raised to get up if an older person came along and offer the seat. We’re kind of losing all that,” he told a 150-strong crowd in Storm Lake, many of them elderly.

Retired teacher Marilyn Schmitt, 68, who came out to see Biden, also heard similar values expressed by Buttigieg, the openly gay mayor of South Bend, Indiana, who swung by her town five days earlier.

Schmitt said Biden had “given us a lot to think about” but that she was not ready to decide between the two in the race for the party’s nomination to take on Republican President Donald Trump in next year’s election.

Biden’s campaign believes a strong showing in Iowa - which will hold the first-in-the-nation nominating caucus and can have an outsized role in helping pick presidential nominees - will buoy his candidacy until more diverse states, such as South Carolina, vote. Biden dominates in polling among African-Americans, who make up a quarter of Democratic primary voters nationwide.

A Monmouth University poll last month showed Biden and Buttigieg tied among moderates and conservatives likely to show up to the Iowa Democratic caucus on Feb. 3, with 26% support apiece. Among rural Iowans, Buttigieg leads Biden, 21% to 19%, according to a Quinnipiac University poll also conducted in Iowa last month.

Like Biden, Buttigieg is critical of the uncompromising liberalism of Warren and Sanders and preaches old-school values that resonate with older, rural voters. The U.S. Navy veteran often speaks of military service, his Christian faith and love of country.

After attending a Buttigieg event in Denison, Iowa, in late November, Daniel Gudahl, 64, said he still had not signed on to a candidate but was happy to see Buttigieg building momentum.

He saw Biden as “too old” and believed Buttigieg’s Midwest roots and moderate stance could help him in the caucus.

“You’ve got to bring center-left and center-right together in Iowa to win. I think he might have that ability,” said Gudahl, who manages a nature conservancy in Coon Rapids, Iowa.

SHARED CONCERNS

Biden and Buttigieg both rolled out rural policy plans months ago and talk about creating high-paying jobs and a future in depopulating towns where children who leave for college often decide to settle elsewhere.

After each event during the bus tour, Biden stayed to shake every willing hand and take photographs. A field organizer would then chase down those people and ask them to commit to “caucus for Joe.” Some did, but many kept their options open.

At one point in the tour, Biden shot back when asked about Buttigieg’s growing appeal - “He doesn’t have the enthusiasm and the moderates. Come on, guys.”

But Biden conceded he had work to do with Iowa Democrats, most of whom he said later were still undecided.

Unlike Biden, who is lagging in online fundraising and must often travel the country to raise money, Buttigieg has turned his fundraising prowess into an ad blitz and more personal trips than any other Democratic front-runner, something Iowans value.

Seventeen percent of likely Iowa Democratic caucus-goers told Monmouth last month that they had seen Buttigieg in person, compared with 15% for Warren, 14% for Sanders and 11% for Biden.

Biden was boosted last week by the endorsement of John Kerry, the 2004 Democratic nominee, who came from behind to win Iowa in 2004 - and said Biden could follow his template.

“He ought to do what he’s doing. He’s got to go meet Iowa,” Kerry said, campaigning with him in Iowa on Friday.

Barbara Ehlers, 65, a teacher from the town of Stanley that has a population of about 125, walked out of Biden’s event in Oelwein “very impressed.”

She also liked Buttigieg, as well as U.S. Senator Amy Klobuchar of Minnesota, another moderate who has been showing signs of strength in the state. How will she decide among the three?

“Keep reading, keep thinking, keep talking to people.”

(This story fixes typo, paragraph 13)