In a blow to Democrats, Rep. Peter DeFazio (D-Ore.) announced this afternoon that he would seek re-election in 2008 rather than challenge Sen. Gordon Smith (R-Ore.), who remains a top Democratic target.

“I have concluded that I can best serve the people of this state by staying in the House and using my seniority and subcommittee chairmanship to improve federal investments in our critical infrastructure and to fight for the interests of Oregonians,” DeFazio said in a statement released by the Democratic Senatorial Campaign Committee.

Since Democrats regained control of the House in January, DeFazio has been chairman of the Transportation and Infrastructure subcommittee on highways and transit, and he has been reluctant to consider the Senate race. But when the DSCC released a poll last month showing him with a 4-point lead over Smith, DeFazio agreed to take a harder look.

Now serving his 11th term, DeFazio appeared to be one of the Democrats’ strongest candidates, because he is a proven votegetter in the Southwest corner of the state, which is usually up for grabs in presidential and statewide elections.

In his statement, DeFazio vowed to help state and national Democratic leaders recruit a strong challenger to Smith, a political moderate who will be seeking his third term in 2008.

“Make no mistake, we need to defeat Gordon Smith and elect a Senator who will fight for all Oregonians and Oregon values every day, not just under pressure of re-election,” DeFazio said. “I will work as hard as I can over the next two years to do that. The new Democratic majority has already started to change Washington, and we need to elect a Senator that will support that change instead of obstructing it.”

With DeFazio out of the picture, the DSCC may turn to Rep. Earl Blumenauer (D) or state Treasurer Randall Edwards (D) to take on Smith. Earlier this year, Blumenauer said he would decide on the Senate race by this fall.

Democratic strategist Steve Novick announced his Senate candidacy earlier this week.

Although Smith remains fairly popular among Oregon voters — who have a long tradition of electing moderate Republicans to the Senate — the state has lately voted Democratic in presidential election years, and President Bush’s poll numbers there remain low. Smith, who is personally wealthy and has been raising money vigorously, remains vulnerable to Democrats’ attempts to tie him to Bush.

“Oregon is one of our top priorities in 2008, and I am confident the Democratic Party will field a nominee who will win,” DSCC Chairman Charles Schumer (N.Y.) said in a statement. “Oregonians are tired of George Bush and his foreign and domestic policy and are ready to elect a Democratic Senator who will show some independence and stand up for the state.”