Seven Alaska state employees have reversed course and agreed to testify in an investigation into whether Republican vice-presidential nominee Sarah Palin abused her powers by firing a commissioner who refused to dismiss her former brother-in-law.

There is no indication so far, however, that Palin or her husband will agree to testify.

Palin, a first-term Alaska governor, is the focus of a legislative inquiry over her firing of Public Safety Commissioner Walt Monegan a year after she, her husband and key advisers began questioning him about getting rid of a state trooper who had gone through a nasty divorce with her sister. Monegan says he was dismissed because he wouldn't fire the governor's former brother-in-law, but Palin contends that he was dismissed for insubordination.

Lawmakers subpoenaed seven state employees to testify in the inquiry, but they challenged those subpoenas. A judge rejected that challenge last week. Because of that ruling, Alaska Attorney General Talis Colberg said the employees have decided to testify.

PALIN STANDS BY WORDS ON OBAMA'S FRIENDS

Palin, campaigning Sunday in Omaha, Neb., defended her claim that Barack Obama "pals around with terrorists," saying the Democratic presidential nominee's acquaintance with Bill Ayers, a founder of the violent Weather Underground group, is an issue that is "fair to talk about." Obama, in Asheville, N.C., dismissed the criticism as "smears" meant to distract voters from real problems such as the troubled economy. Obama has denounced Ayer's radical views and activities.

Minnesota Gov. Tim Pawlenty, appearing on ABC's "This Week," sided with Palin. "It goes to the issue of judgment," he said.

As the character attacks escalated, several Obama surrogates said his supporters may start reminding voters of McCain's ties to Charles Keating, a convicted savings and loan owner whose actions 20 years ago triggered a Senate ethics investigation that involved McCain as one of the "Keating Five."

Just months into his Senate career, in the late 1980s, McCain made what he has called "the worst mistake of my life," participating in two meetings with banking regulators on behalf of Keating, a friend, campaign contributor and S&L financier who was later convicted of securities fraud.

The Senate ethics committee investigated five senators' relationships with Keating. It cited McCain for a lesser role than the others, but faulted his "poor judgment."

BIDEN CANCELS AFTER MOTHER-IN-LAW DIES

Joseph Biden, Democratic vice-presidential nominee, has canceled his campaign appearances today and Tuesday after the death of his mother-in-law Sunday. Biden spokesman David Wade said Bonny Jean Jacobs, the mother of Biden's wife, Jill, died after a long illness.

Jacobs was 78 and lived in Willow Grove, Pa. Wade described her as a "homemaker and avid gardener with a lifelong love of reading."

MCcain's brother sorry for 'communist' remark

McCain's brother made an apparent joke at a campaign rally this weekend that might not play well in parts of newly competitive Virginia.

Joe McCain, speaking at an event in support of his brother, called two Democratic-leaning areas in northern Virginia "Communist country," according to a report on the Washington Post's website.

"I've lived here for at least 10 years and before that about every third duty I was in either Arlington or Alexandria, up in Communist country," Joe McCain, a Navy veteran, said at an event in Loudoun County, Va.

Joe McCain then apologized, but the remark drew laughter at the event, according to the report.

NEWS SERVICES