In the first major recruiting coup for Senate Democrats of the 2004 cycle, former Alaska Gov. Tony Knowles (D) announced Tuesday that he would be a candidate for Senate next year.

A formal campaign kickoff won’t take place until later this year, but Knowles on Tuesday sent a letter to supporters outlining his reasons for running.

“Some of our most important fights for Alaska take place in our nation’s capital,” the former two-term governor wrote. “Decisions get made about our future, thousands of miles away in Washington, D.C., by people who don’t live in our state and don’t understand our special way of life.”

With Knowles’ announcement, Alaska zooms to the top of the Democratic Senatorial Campaign Committee’s target list, and national Democrats are convinced they have a solid chance of defeating freshman Sen. Lisa Murkowski (R), who was appointed to the post by her father in late December 2002.

“I’m excited about it,” said DSCC Chairman Jon Corzine (N.J.). “I think he’s a quality human being, and I think he’ll be a quality candidate.”

Murkowski’s political troubles may not end there. She still faces the threat of a strong challenge in the Republican primary, and Jerry Hood, secretary-treasurer of Teamsters Local 959 in Alaska, told Roll Call on Tuesday that he is “inclined” to compete for the GOP nomination and plans to make a final decision by the end of the month.

Hood said he is in the midst of his second statewide swing, talking to a range of Alaskans about his possible candidacy.

“The way I’d characterize it now is, the response I’m getting is favorable, which means I’m inclined to run,” he said.

Businessman Johne Binkley, a former state Senator who is also chairman of the Alaska Railroad Corp., the state-owned entity that operates passenger and freight railroads, has also been mentioned as a possible Republican Senate candidate. He was traveling Tuesday and could not be reached for comment.

Regardless of who runs, Murkowski will start off with a fundraising advantage. In an interview Tuesday, she said she would report raising more than $900,000 through June 30 and has more than $800,000 in the bank, exceeding her goal of raising a half-million dollars in the first half of the year.

“We feel very, very good and confident,” she said.

Murkowski said Knowles’ decision comes as no surprise.

“It’s nice to know I’ve got opposition,” she said.

The prospect of a Republican split has to worry GOP leaders; Knowles was able to win two terms as governor in a heavily Republican state because the GOP was divided in each of his elections. He took 41 percent of the vote in 1994 (and won by just 536 votes) and 51 percent in 1998.

Dan Allen, communications director for the National Republican Senatorial Committee, said Knowles’ relatively weak showings in his gubernatorial victories make Republicans optimistic that they will retain the Alaska seat.

“Tony Knowles has never won overwhelmingly in Alaska,” he said. “Senator Murkowski is working on the issues that matter most to Alaskans.”

Republicans also believe that the presence of President Bush at the top of the ticket will help Murkowski — or whoever winds up the GOP nominee. Bush defeated Democrat Al Gore by 31 points in Alaska in 2000, and Knowles — also a former mayor of Anchorage — has never appeared on the statewide ballot in a presidential year. Former two-term Sen. Mike Gravel was the last Democrat to win federal office in Alaska, back in 1974.

Still, Knowles is a political moderate who is considered a formidable fundraiser. Like most successful politicians in the Last Frontier, Knowles has many allies in the powerful and generous extractive industries. And as a businessman who owns a chain of restaurants, he has close ties to the business community.

Scott Sterling, chairman of the Alaska Democratic Party, predicted that Knowles’ chances next November are “excellent.”

In his letter to supporters, Knowles obliquely addressed the issue of Republican dominance in Alaska, arguing that the state would benefit from bipartisan representation in Washington.

“When Alaska has a strong voice in both national parties, our message will be heard,” he wrote.

Knowles boasted about his tenure in Juneau and promised more of the same.

“For eight years we had a growing economy,” he wrote. “We expanded health care to Alaska’s children, revitalized education, and made our communities safer. We accomplished a lot together by putting jobs and families first.”

Knowles said he would spend the next several weeks “building a grassroots organization.” He has not yet hired any consultants, but he is expected to turn to many of the Alaska operatives who worked on his campaigns and in his administration.

Knowles’ letter did not mention Murkowski or the issue that could wind up being her political Achilles’ heel: the way she was appointed. Murkowski was named to the Senate by her father, Knowles’ successor as governor — and former four-term Senator — Frank Murkowski (R).

Although Frank Murkowski released a list of more than 20 people he was considering appointing to fill the remainder of his Senate term — including Hood and Binkley — he eventually turned to his daughter, who was then an obscure four-year veteran of the state House.

Democrats believe that cries of nepotism, coupled with the criticism of some of Frank Murkowski’s budgetary maneuvers, could wind up hurting his daughter in 2004.

But Allen insisted that Lisa Murkowski will be judged on her own record, and touted a GOP poll from May showing the freshman Senator with a 57 percent favorable rating, one point ahead of Knowles’ own favorability numbers.

Chris Wright contributed to this report.