AMES, Iowa — Extreme partisan rhetoric and market havoc have raised the stakes of two early tests in Iowa this week for the unsettled crop of Republican candidates vying to challenge US President Barack Obama.

Minnesota congresswoman Michele Bachmann is hoping to chip away at the lead of frontrunner Mitt Romney, the former governor of Massachusetts, in a nationally-televised debate Thursday ahead of Saturday's closely-watched Ames Straw Poll.

Texas Governor Rick Perry could end up stealing the spotlight with a speech the same day in South Carolina, where he is expected to finally announce -- or at least acknowledge -- plans to throw his hat into the ring.

And Tim Pawlenty, who has been unable to draw more than about three percent support in recent polls, is currently trying to downplay what some see as a make-or-break week for the former Minnesota governor.

Iowa is important to the presidential election process because the state holds the first-in-the-nation caucuses in the party nominating process.

The straw poll at a Republican fundraiser is seen as a key early test of a candidate's appeal and organizational strength and the debate should influence the results.

Both events in the city of Ames are expected to draw political blood, potentially further polarizing Republican candidates among each other but most specifically taking aim at Obama, said Larry Sabato, who heads the University of Virginia Center for Politics.

"The toxicity level is about has high as I can remember," said Sabato, the author of 24 books on American politics. "Part of it is the circumstances. When voters are in a surly mood, the candidates reflect it."

The foul mood has been present for months but intensified last week after Standard and Poor's downgraded the US government's credit rating from AAA to AA+ for the first time in history.

The credit rating agency cited a partisan congressional standoff over reducing the nation's debt as a main contributor to the downgrade.

Republicans blame Obama for what they say are irresponsible fiscal measures like the national health care reform law or banking regulations they say have made it difficult for businesses to hire more employees.

Democrats, in turn, have painted Republicans as extremists who are associated with the arch-conservative Tea Party and have poisoned the bedrock of American politics.

This week, for example, the Democratic National Committee announced a campaign called "Extreme Aims" to highlight Republican presidential candidate positions they say "would end Medicare as we know it" and would approve "more tax giveaways to millionaires, billionaires and the special interests."

A New York Times/CBS poll found that just 20 percent of Americans view the Tea Party favorably and 43 percent think the staunch conservatives have too much influence in the Republican Party.

But some Republican leaders say the Tea Party's general message of reduced government spending is amplified by the past week's economic events.

"Despite the fact that we have great commodity prices right now, Iowans aren't secure in the long-term financial security of the country," said Republican Party of Iowa chairman Matt Strawn.

Perry's entry to the race could further split the vote among conservative candidates with Tea Party ties, said David Wasserman of The Cook Political Report, a nonpartisan publication that analyzes elections and campaigns.

"Republicans these days are more of a social conservative Tea Party flavor than they were 10 or 12 years ago," Wasserman said. "Any candidate like Romney would benefit from a split in social conservatives."

Both events will help winnow out the weaker candidates from a field of more than a dozen declared and undeclared presidential hopefuls.

The straw poll is specifically seen as helping candidates build grassroots support essential for winning the state's February 6 caucus.

Candidates who win one of the top three places in the Iowa caucuses have historically gone on to win their party's nomination thanks to the momentum gained by an early show of strength.

The straw poll is unscientific and has been criticized as playing too heavily in favor of well-financed campaigns since candidates can buy the $30 tickets for their supporters.

Its importance could also be downplayed because so many high-level candidates -- Romney, Perry, former House Speaker Newt Gingrich and former Utah Governor Jon Huntsman -- are not formally attending, although all but Perry will appear on the ballot.