A local Republican group has distributed a newsletter picturing Democratic presidential candidate Barack Obama on a fake $US10 bill adorned with a watermelon, ribs and a bucket of fried chicken.

The drawing harked back to racist images from decades ago in America that featured caricatures of blacks eating watermelon and other Southern foods, often suggesting they were lazy or unclean.

Linking Senator Obama, who is the first black presidential nominee of a major US political party, to such stereotypes drew denunciations from various Republican officials.