As he campaigns for president, Sen. John McCain often tells an old joke about another Arizona politician who sought the White House more than 20 years ago.

As the story goes, then-Rep. Morris Udall popped into a Manchester, N.H., barbershop one day in 1976. "I'm Morris Udall of Arizona and I'm running for president of the United States," he said. "Yeah," one of the barbers replied. "We were just laughing about that this morning."

McCain has told that story again and again, but on Thursday night it included a new ending that punctuated the challenge he now poses to Texas Gov. George W. Bush in the state that holds the nation's first presidential primary.

"That's the way we began this campaign, my dear friends," McCain said as the raucous crowd began to quiet. "A lot of people were laughing about it and said this thing was a done deal. Thanks to you--dear friends and comrades-in-arms--it ain't any done deal. We're having a great time and we're on a roll."

McCain was standing in a tent next to the VFW hall here on a frigid Veterans Day evening. He had started the day farther north in Laconia, and his journey south had been politically exhilarating and sometimes emotionally draining. The campaign tour provided evidence to buttress polls showing that Bush's once commanding lead has narrowed, with McCain on the rise.

With McCain emerging in New Hampshire as the clear challenger to Bush, the Republican race here now mirrors the Democratic race: two candidates with similar views on issues but sharply contrasting styles.

Bush campaigns in classic front-runner style--personable and friendly but well-contained, rarely straying beyond the prepared script. Bush floated through the state Wednesday afternoon to file his papers of candidacy with the secretary of state.

He spoke briefly to his supporters, did a live television interview, sparred with reporters at a short news conference and then attended a dinner honoring the New Hampshire National Guard. There he read an eloquently written speech and shook virtually every hand in the room.

Asked about his ads that say saving Social Security will be one of his top priorities as president, Bush said he "may or may not" offer a reform plan during the campaign. Asked if he could cite a substantive difference with McCain, Bush said, "I'm sure we'll think of a few over time, but not right now."

McCain is anything but contained. He bores in on voters and exposes himself to endless questions from citizens. He rode his campaign bus for 2 1/2 days last week and appeared at numerous town hall meetings.

Along the way, he engaged reporters traveling with him in a nonstop news conference that allowed him to display a command of issues and, in particular, a knowledge of history and foreign affairs. China. Russia. The Middle East. Indonesia. Even Burma.

Once he got stumped. A Swiss radio reporter wrapped up an otherwise straightforward interview by asking McCain if he knew the capital of Switzerland. McCain guessed Geneva or Zurich. "The capital is Bern," the reporter said. "I've revealed my ignorance," McCain responded. Later to his staff, he said, "I screwed up."

Now that McCain is rising, the Bush campaign has set its sights on stopping him. It is putting more resources into New Hampshire, which will mean more ads, more direct mail, more phone calls.

Last week, the Bush campaign sent out a series of press releases announcing veterans committees for Bush in New Hampshire and many other states and unveiled proposals to improve veterans' health benefits. McCain has spent months organizing veterans behind his candidacy and did not seem impressed by the Bush effort. "I've been discussing veterans issues every day," he said.

On Veterans Day, McCain unveiled a committee of 500 veterans and claimed they represent roughly 10,000 veterans in New Hampshire who support his candidacy. "No one ever tried to organize them before," said Paul Chevalier, past commander of the New Hampshire VFW and a McCain supporter.

His entourage was reminiscent of USO tours of the troops overseas. Along with McCain were other veterans and fellow POWs from Vietnam, plus actress and entertainer Connie Stevens, who began touring hot spots with Bob Hope in Korea at age 16.

"He has the qualities I've always admired in my father, in my brothers," she said in Hudson on Thursday night. "Strength of character. Funny. Fair. Protective. He can't be bought and he can't be bullied."

McCain's rise in New Hampshire has begun to return dividends. Campaign manager Rick Davis said the campaign raised about $2 million in October, the best month so far this year, and as of late last week had raised $1 million in November.

The Bush campaign continues to display public confidence, but New Hampshire represents an unexpectedly stiff challenge to the GOP front-runner, whose money may be a liability as well as an asset. "I won't vote for Bush," said Ralph Vincent, a Navy veteran from Laconia. "He thinks his money will get him through." Vincent said Bush lacks experience: "Our best presidents have been men who were in the war--shot at, if not hit."

John Turner, an Air Force veteran from Salem, said Bush likely will be the next president. "He's got the machine behind him, he's got the money behind him," he said, but added that McCain's support among veterans is impressive. "Right now, McCain's doing a better job at the grass roots," Turner said.

Here in New Hampshire, McCain is attempting to turn his campaign into a crusade, and on Thursday night, he closed his speech with a call to arms. "I'd like for you to do me a favor, probably a favor that will make me forever in your debt," he told the veterans. "I would like for you to join me in one more mission and help me get to the White House."

CAPTION: Sen. John McCain has visited many town meetings in New Hampshire.