COLUMBIA - U.S. Sen. Evan Bayh, D-Ind., said Wednesday he's preparing for a possible bid for president in 2008 and wanted to test South Carolina's political waters.

Mr. Bayh says he knows South Carolina, which is the third contest after Iowa and New Hampshire, could play a big role in securing the Democratic nomination.

The former Indiana governor rallied top Democrats at a reception honoring past and present party leaders in the South Carolina congressional delegation, telling them he knows what it will take for Democrats to win back control.

He said Indiana has a lot in common with South Carolina, including "the values in our respective states and the economic challenges that we face, and of course, as Democrats, it's always a little uphill in places like South Carolina and Indiana. I think that might give us a special kinship as well."

Mr. Bayh also said he recognizes how to rebuild the party by sending a message that "we really do want to provide the kind of leadership that reaches out to independents and reasonable Republicans."

He said Democrats need to improve their credibility on national security and convince Americans that Democrats are willing to use force when necessary.

He also says Democrats need to have a message about improving the economy at a time of globalization and fiscal discipline.

"I think very often the public sees us as just a collection of public interests," Mr. Bayh said.

He also criticized President Bush for failing to inspire people to work together.

"Regardless of geography, I think Americans really do yearn for more unity and less division," Mr. Bayh said. "I think people understand that these are serious times, that we face serious challenges and we're not going to be able to meet them if we're divided."

Mr. Bayh said his message would resonate with voters in a state like South Carolina, where nearly a third of the population is black.

"I've got a long record book as governor and in the Senate of standing for social justice," Mr. Bayh said. "I appointed the first minority individual and the first woman to our state Supreme Court."

U.S. Rep. Jim Clyburn, D-S.C., said Mr. Bayh's Midwestern values appeal to Southerners.

"Evan has a tremendous shot in South Carolina," he said.

The Democratic Party raised about $25,000 at the event.