Republican hopes of an early electoral resurgence against President Barack Obama took a blow Friday when the party’s candidate in a tight New York congressional race conceded defeat.

Jim Tedisco, a veteran state-level politician, abandoned his challenge against Democratic opponent Scott Murphy, who is now set to fill the empty congressional seat in Washington.

"Tedisco ran a tough but an ultimately unsuccessful race," Republican National Committee chairman Michael Steele said in a statement.

Obama said that with the hard-fought victory, Murphy showed "he is willing to fight the tough battles on behalf of the people in his district."

Murphy "courageously championed the economic plans we need to lift our nation and put it on a better path," Obama said in a statement.

The special election for the seat held by Democrat Kirsten Gillibrand — who filled Hillary Clinton’s US Senate spot after she was appointed Obama’s secretary of state — was seen as a test of Republican ability to overcome last year’s electoral drubbing and loss of the White House.

The election for upstate New York’s 20th Congressional District took place March 31, but an extraordinarily tight result led to counting slowing to a crawl, as absentee ballots came in and challenges addressed.

At last count, the two candidates were separated by 399 votes, with Murphy ahead, John Conklin of the New York state election board told AFP.

"There are still objections lodged in court and there are still disputed ballots. I expect that both parties will withdraw their objections," he said.

The Republican party had long been strong in the mostly rural area, which is far removed from liberal New York city.

Although the rugged district of forests and mountains has historically been Republican territory, Steele vowed to fight on despite the set back.

Republicans "must be competitive in districts like NY-20 if we are going to regain our congressional majorities," he said.

The effort put into the close race showed the party "is going to invest the resources necessary to regain our majority in the US House of Representatives," Steele said

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