(FORTUNE Magazine) – Joe Lieberman should be the hands-down front-runner for President among Democrats. He came within a chad's width of being elected Vice President and is better known than any of his eight rivals. But polls show that the Connecticut Senator is behind in such key states as Iowa and New Hampshire, and political insiders don't give him much chance of winning the nomination. There are several reasons for this, but one big one is rarely discussed in public: Lieberman is a Jew.

I hate to write those words. I'm Jewish and--I admit it--I like Lieberman. He's wry and wise in the right proportions and willing to defy his party on matters of principle. He's a good man. But he is also a member of a tiny and long-scorned minority. Plenty of people won't vote for him simply because of his religion, whether they admit it or not. And, I'm ashamed to say, lots of Jews are reluctant to back him as well. After suffering years of discrimination, they fear that having too prominent a Jew on the national scene could spark an outbreak of anti-Semitism.

That may come as a shock, given what a hit Lieberman was in 2000. The novelty of having a Jew on the ticket for the first time was widely considered a boon for the Democrats and helped revive Al Gore's lackluster campaign. Many experts asserted that Lieberman's devout beliefs attracted voters, particularly fundamentalist Christians who were otherwise Republican stalwarts. If there was strong anti-Jewish feeling, it didn't show up in the polls.

But Lieberman was running for Veep back then. Now, as a candidate for the top spot, he faces much tougher scrutiny. Issues that barely mattered in 2000 can be important. Such as this basic fact: Only 2% of Americans are Jewish. If you live in or near a big city like New York or Los Angeles, that sounds too low. But in fact, to most Americans, Jews are strangers. Lieberman's form of the religion, Orthodox Judaism, is especially unfamiliar. He stops whatever he's doing three times a day to chant his prayers. He occasionally carries kosher meals on the road. Friday night and Saturday, to observe the Sabbath, he doesn't work, ride in a car, or turn on lights (except in an emergency). Having grown up in an Orthodox family, I understand and even admire those acts, but I doubt my view will be widely shared.

The nonpartisan Anti-Defamation League (ADL) published a survey last year showing that anti-Jewish sentiment was on the rise. It found that 17% of Americans, or about 35 million adults, "hold views about Jews that are unquestionably anti-Semitic." That represented an increase from 12% in 1998. What is more, the ADL found, 35% of African Americans held strong anti-Semitic opinions. Black votes are significant in several early Democratic primaries, particularly South Carolina, where they'll make up a third to half of the electorate. Rural white voters in the state might also think twice about Lieberman, says Scott Huffmon, a political scientist at Winthrop University in Rock Hill, S.C. "In a place where the Confederate battle flag is so prominent, [Lieberman's] religion will be in the minds of many people." Right now, Lieberman is slightly ahead of his rivals in South Carolina polls--and in nationwide polls as well--but that's mostly because of name recognition. He's significantly behind "undecided."

Democratic leaders say they don't hear much talk about anti-Semitism--except among Jews. And among them, there's a lot. "There's a sense of pride, but at the same time there's significant nervousness," says Abraham Foxman, national director of the ADL. "If Lieberman makes a mistake, will it redound to the detriment of the Jewish community?"

Lieberman also faces trouble on foreign policy. Some Jews worry that if one of their own were President, he would have to restrain his pro-Israel impulses to avoid criticism. Says one Jewish pollster who works for Democrats: "There are a lot of Jews who are saying 2000 was a great time to have a Jewish Vice President, but 2004 seems like a bad time for a Jewish President."

Indeed, President Bush's steadfast support of Israel has inspired a growing number of Jews, who have traditionally voted heavily Democratic, to consider backing the GOP in the next election. That trend has hurt Lieberman where it counts. The largest surprise of the political season has been that Lieberman is trailing his Democratic opponents on the money front. His donations lag behind those of John Edwards of North Carolina, John Kerry of Massachusetts, and Richard Gephardt of Missouri. Lieberman's aides say that he's catching up fast and assert that Jewish money is rolling in just fine. But official Washington has noticed the problem and is discounting Lieberman's chances.

Lieberman has weaknesses that go beyond religion. He's a pro-business moderate in a party that appears to want a populist as its standard-bearer. What's more, the type of Democratic activists who tend to vote in primaries hated the war with Iraq that Lieberman so stoutly defended.

Then again, Americans' open-mindedness has been underestimated before. John F. Kennedy was supposed to lose the presidential election in 1960 because he was Catholic. Instead he broke a religious barrier. The Democratic field for President this year is actually chock full of Jewishness. Kerry recently revealed that his paternal grandparents were Austrian Jews who converted to Catholicism. Former Governor Howard Dean of Vermont has spoken at length about his Jewish wife, Judy, and his two Jewish-raised children. And if Congress is a guide, Jews are more than welcome. Capitol Hill has a record number of Jewish lawmakers: 11 in the Senate and 24 in the House.

But whether a Jew can reach the White House is very much in question. And that I sincerely regret.