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In a development that sends the contest into uncharted territory, the US president, Joe Biden, announced that he will no longer be seeking a second term.
He has thrown his support behind Kamala Harris, urging Democrats to donate to her campaign as he pulled out.
In a letter addressed to "my fellow Americans", Mr Biden said it had been the "greatest honour of my life to serve as your president".
"While it has been my intention to seek re-election, I believe it is in the best interest of my party and the country for me to stand down and to focus solely on fulfilling my duties as president for the remainder of my term."
He has endorsed Mrs Harris as the Democratic nominee, saying: "Democrats - it's time to come together and beat Trump."
Mr Biden made the announcement in a statement posted to X, in which he said he would address the nation later this week to provide "detail" about his decision.
"For now, let me express my deepest gratitude to all those who have worked so hard to see me re-elected.
"I want to thank vice president Kamala Harris for being an extraordinary partner in all this work. And let me express my heartfelt appreciation to the American people for the faith and trust you have placed in me.
"I believe today what I always have: that there is nothing America can't do - when we do it together. We just have to remember we are the United States of America."
Mr Biden's wife Jill Biden reposted the statement on X with a loveheart.
Dozens of congressional Democrats had publicly urged the 81-year-old to drop out of the race after his shaky debate performance last month against Republican challenger Donald Trump, 78.
President Joe Biden and Donald Trump have squared off in the first debate of the 2024 United States presidential race, seeking to pull ahead in a match-up that has, so far, been in a dead heat.
But despite delivering the opening salvo in Thursday’s event, Biden struggled to articulate his points at several moments, appearing to fumble for his words.
Meanwhile, Trump took the opportunity to redirect the conversation at several points to Biden’s perceived weaknesses, drumming up fears about immigration and the state of the economy.
He also attempted to dodge questions about whether he would honour the results of November 5’s presidential election, saying he would only do so if it was “fair” and “free” – and then reiterating false claims that the 2020 election was rigged.
“The fraud and everything else was ridiculous,” he said at one point, casting doubt on President Biden’s win in 2020.
Trump currently faces two criminal indictments – one in Georgia and another in Washington, DC – over his alleged attempts to subvert those election results.
We have the first comments by Harris following Biden’s announcement that he is backing her to become the Democratic Party’s nominee.
“I am honored to have the president’s endorsement and my intention is to earn and win this nomination,” the vice president said.
“I will do everything in power to unite the Democratic Party – and unite our nation – to defeat Donald Trump,” Harris added.
She also said: “With this selfless and patriotic act, President Biden is doing what he has done throughout his life of service: putting the American people and our country above everything else.”
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