Moments later, Clinton said that she was fighting against misguided Republican policies "when you were practicing law and representing your contributor ... in his slum landlord business in inner city Chicago."
Obama seemed particularly irritated at the former president, whom he accused in absentia of uttering a series of distortions to aid his wife's presidential effort.
"I'm here. He's not," she snapped.
"Well, I can't tell who I'm running against sometimes," Obama countered.
The two rivals, joined by former Sen. John Edwards, debated at close quarters five days before the South Carolina primary - and 15 days before the equivalent of a nationwide primary across 20 states that will go a long way toward settling the battle for the party's nomination.
Clinton was the national front-runner for months in the race, but Obama won the kick-off Iowa caucuses three weeks ago, knocking her off-stride. She recovered quickly, winning the New Hampshire primary in an upset, and on Saturday, won the popular vote in the Nevada caucuses while Obama won one more delegate than she.
The Democratic electorate in South Carolina is expected to be roughly 50 percent black, an evident advantage for Obama in a historic race that matches a black man against a woman.
Even in the superheated atmosphere of the primary, the statements and exchanges between Clinton and Obama were unusually acrimonious. The debate came as the two campaigns continued to complain about dirty politics and disenfranchisement of voters in last Saturday's Nevada caucuses.
Obama suggested the Clintons were both practicing the kind of political tactics that had alienated voters.
"There was a set of assertions made by Senator Clinton as well as her husband that are not factually accurate," Obama said. "I think that part of what people are looking for right now is someone who is going to solve problems and not resort to the same typical politics that we've seen in Washington."
Clinton countered: "I believe your record and what you say should matter."
Edwards, who badly trails his two rivals, tried to stay above the fray while pleading for equal time.
"Are there three people in this debate, not two?" he asked.
"We have got to understand, this is not about us personally. It's about what we are trying to do for this country," Edwards said to applause from the audience.
Hillary Clinton, who was close with the Walton family, served on the Wal-Mart board from 1986 to 1992. In 2006, her Senate campaign returned $5,000 to the company's political action committee while citing differences with company policies.
A blind trust held by Clinton and her husband, the former president, included stock holdings in Wal-Mart. They liquidated the contents of the blind trust in 2007 because of investments that could pose conflicts of interest or prove embarrassing as she ran for president.
Chicago real estate developer and fast food magnate Antoin "Tony" Rezko was a longtime fundraiser for Obama. Prosecutors have charged him with fraud, attempted extortion and money laundering in what they allege was a scheme to get campaign money and payoffs from firms seeking to do business before two state boards.
Obama's campaign said Saturday it was giving to charities more than $40,000 from donors linked to Rezko. In 2006, when charges against Rezko were made public, Obama gave $11,500 in Rezko contributions to charities.
Often speaking over each other, Obama and Clinton bitterly complained about each other's legislative records. Obama questioned why the New York senator had voted for a bankruptcy bill that she later said she was glad hadn't passed, and Clinton criticized Obama for voting "present" on dozens of occasions while a member of the Illinois legislature.
"Senator Obama, it's hard to have a straight up debate with you because you never take responsibility for any vote," Clinton said to loud boos. "On issue after issue, you voted present ... Whenever someone raises that, there's always some sort of explanation."
Obama accused Clinton of playing loose with the facts and saying anything to get elected, while Edwards joined Clinton in criticizing Obama for the "present" votes.
"Why would you over 100 times vote present?" Edwards pointedly challenged Obama. He said he didn't simply refuse to vote on controversial bills in Congress. "It would have been safe for me politically ... but I have a responsibility to take a position even if it costs me politically."
Obama said most of his present votes didn't have political consequences but were because of technical or legal concerns.
"Don't question, John, that on issue after issue that is important to the American people, I haven't followed. I have led," Obama said.
"Present" votes are common in the Illinois legislature, and they have the same impact as a "no" vote. Legislators use them for a variety of reasons, from registering doubts about a measure's legality to avoiding a firm position.
With the holiday honoring the Rev. Martin Luther King Jr., as a backdrop, the candidates also addressed questions of racial equality.
Clinton and Edwards compared their records on helping to alleviate poverty, while Obama was asked if he agreed with the famed black novelist Toni Morrison who dubbed Bill Clinton "the first black president."
Obama praised the former president's "affinity" with black people but also drew laughs.
"I would have to investigate more, Bill's dancing abilities and some of this other stuff before I accurately judged whether he was, in fact, a brother," Obama said.
"I'm sure that can be arranged," Clinton joked.
The two-hour debate was sponsored by the Congressional Black Caucus Institute and CNN.
