WASHINGTON (AFP) - US President Barack Obama's Republican foes rejoiced Wednesday after winning two key election races, painting them as a big step in the bruised party's steep uphill journey to the 2010 mid-term votes.

But the results on Tuesday also highlighted an intra-party feud between moderates and conservatives that may make it hard for Republicans to capitalize next year on deep worries about the US economy.

"The Republican renaissance has begun," said Republican National Committee chairman Michael Steele, cheering the political shot in the arm after routs in 2006 and 2008 cost the party control of the Congress and the White House.

Republicans won the governorships of Virginia and New Jersey, but a party rift cost them a congressional seat from New York that they had held for a century, and Democrats, as expected, retained a House seat from California.

Exit polls gave no sure sign that voters were sending a message about Obama, who campaigned for the vanquished Democratic gubernatorial candidates, but highlighted fears and anger about the sour US economy 10 months into his term.

"The biggest vulnerability right now that the White House has is spending, and voter fatigue with spending, bailouts, and the sluggish economy," said Republican strategist Kevin Madden.

With the president off the ballot, many independents who powered his history-making 2008 bid stayed home, and those who came out went for the Republicans, another warning sign for Democratic incumbents in 2010.

"I don't think it's so much a referendum on the president," said Steele, who hailed the vote as an outraged scream against "an incredibly arrogant government in Washington" and against Democratic economic policies.

In Virginia, the economy was the top issue, 85 percent of voters said they worried about the direction of the economy in 2010, and two thirds of those concerned voted for Republican Bob McDonnell, according to exit polls.

Obama carried Virginia in 2008 -- the first Democratic presidential hopeful to do so in more than four decades.

"The wind has shifted very quickly with this electorate. And so one take-away for Republicans is that, while we had a good night, it can shift quickly back the other way," said Madden.

The 2010 mid-terms will shape the rest of Obama's presidency: One third of the Senate, the entire House of Representatives, and most US governorships are up for grabs.

In New Jersey, the economy was the top issue, 89 percent of voters said they worried about the direction of the economy, and Republican Chris Christie enjoyed about an eight-point edge over Democratic incumbent Jon Corzine.

In both states, wide majorities said Obama did not shape how they voted.

In the New York race, in which a conservative surge drove Washington Republicans' chosen candidate from the ballot and even led her to endorse her one-time Democratic rival as he defeated the right-wing choice.

That defeat "proves the need for Republican unity," said Republican Representative Thaddeus McCotter.

While conservatives crowed they had proven their clout, Steele declared: "I don't see a victory in losing seats. I'm not in the business of division and subtraction. I'm in the business of multiplication and addition."

Madden said: "Right now, we are kind of searching, as a party, for who we are, what we stand for, and these intra-party debates are a natural part of the process of rebuilding."

The party lacks a clear national leader, suffers from a decline in the number of Americans who identify themselves as Republicans, and has lagged behind Obama in polls on who will better tackle top voter concerns.

A recent ABC television poll found Obama's job approval had slipped but that just 19 percent of the US public trusts Republicans in Congress to make the right decisions for the country's future.

On the other hand, a recent CNN television poll found that 50 percent of respondents said they favored their local Democratic candidate, against 46 percent for the Republican, in the 2010 elections.