Former Senator and Secretary of State Hillary Clinton squared off against Vermont Senator Bernie Sanders for the first time after their sole rival, Martin O’Malley, dropped out of the race, following a dismal finish in the Iowa Caucus.

Clinton and Sanders were keen to show off their differences at the debate after finishing with the closest margin in Iowa history, where the ex-first lady eked out the smallest of leads and declared victory.

The central conflict at the debate centered on who could rightly claim the title of being "progressive," and thus deserving of the candidacy for the country's left-leaning party.

Sanders slams Clinton's Wall Street ties

On that count, Sanders called out Clinton on her ties to big banks and the finance industry. "The business model of Wall Street is fraud," said the self-proclaimed Democratic socialist.

Clinton admitted she should have been more forthcoming about "explaining [her] record" to voters with regards to Wall Street.

But she countered with a pledge: "I have stood firm, and I will be the person who prevents them from wrecking the economy again."

Clinton: Sanders lacks foreign policy experience

The pair also clashed on foreign policy. Sanders insisted that the US must cease acting like the policeman of the world, and "work in coalition" with other powers to handle threats to global security, and mentioned his vote against the Iraq War in 2003.

On this front, Clinton touted her experience as Secretary of State, saying it was necessary to "be ready on day one," and hit back at Sanders by saying, "A vote in 2002 is not a plan to defeat ISIS," using an alternative acronym for the self-proclaimed "Islamic State" group.

Although Senators Sanders has a clear lead in polls for the next primary election in New Hampshire, Clinton attacked his Democratic credentials by reminding the public that most of Sanders' political career had been spent as an independent, not a Democrat, and that four former governors of his own state of Vermont have endorsed her.

Sanders then admitted that he "would like to see changes in the Democratic Party" and see it more oriented towards the needs of the working class.

The former secretary of state summed up her argument early in the debate by accusing Sanders of having unrealistic goals.

"Senator Sanders and I share some very big progressive goals," Clinton said, using the buzzword of the evening. "But the numbers just don't add up from what Senator Sanders has been proposing."

The pair were much more concilitatory towards each other than their Republican counterparts, however, with Senator Sanders declaring, "On our worst days, I think it is fair to say, we are a hundred times better than any Republican candidate."

The next big test for the rivals will be the primary in New Hampshire on Tuesday. Clinton won the vote over Barack Obama in 2008, before eventually losing the party’s support to the current president.

es/gsw (AP, dpa, Reuters)