U.S. Senator Ted Cruz soundly defeated billionaire Donald Trump in Iowa's Republican nominating contest on Monday, upending the party's presidential race and creating a three-way competition with establishment candidate Senator Marco Rubio.

A conservative lawmaker from Texas, Cruz won the first state Republican contest with 28 percent of the vote in Iowa compared to 24 percent for businessman Trump. Rubio, a U.S. senator from Florida, came in third with 23 percent, making a stronger-than-expected finish.

Source: b'File Photo of Ted Cruz | Source: Reuters'

Cruz's win and Rubio's strong showing could dent the momentum for Trump, whose candidacy has alarmed the Republican establishment and been marked by controversies ranging from his calls to ban Muslims temporarily from entering the United States to promising to build a wall on the U.S.-Mexican border.

"Tonight is a victory for courageous conservatives across Iowa and all across this great nation," Cruz, 45, said during a victory speech lasting more than 30 minutes.

Source: b'File Photo of Donald Trump | Source: Reuters'

An uncharacteristically humbled Trump, 69, congratulated Cruz and said he still expected to win the Republican nomination. Opinion polls show Trump leading nationally and in New Hampshire, which holds the next nominating contest.

Unusually large crowds poured into schools, churches and other venues for the so-called caucuses, in which voters gather together to select a candidate.

Cruz's well established get-out-the-vote effort helped overcome the enthusiasm from large crowds that have shown up for Trump's rallies. Trump skipped the last Republican debate before the caucus because of a dispute with host FOX News. A Trump adviser said his second-place finish was expected.

Iowa has held the first contest in the country since the early 1970s, giving it extra weight in the electoral process that can translate into momentum for winning candidates.

(Feature Image Source: Reuters)