McCain ended days of suspense earlier on Friday when he flew to Mississippi for the debate, backing away from his promise to skip the showdown if negotiations were not completed on a rescue of the US financial industry.

The Arizona senator's campaign said enough progress had been made that he could participate in the first presidential debate, which could help decide a tight race in the Nov. 4 presidential election.

"We have finally seen Republicans and Democrats sitting down and negotiating together and coming up with a package," McCain said.

The debate was scheduled to focus on foreign policy and national security, but the turmoil on Wall Street has dominated the campaign trail for nearly two weeks and was the first topic raised.

White House talks among McCain, Obama and congressional leaders ended in disarray on Thursday with no agreement on a stalled $700 billion bailout plan proposed by the Bush administration.

'OUT OF CONTROL'

McCain, who has fought local pet spending projects in Congress, said spending restraint would be a vital part of any economic recovery. "The reason, one of the major reasons why we're in the difficulties we are in today is because spending got out of control," he said.

Obama said McCain had backed the spending plans of Bush and Republicans. "John, it's been your president who you said you agreed with 90 percent of the time who presided over this increase in spending," he said.

The debate was expected to be watched by far more than the 40 million Americans who saw the convention acceptance speeches of McCain and Obama, and could be a crucial factor for undecided voters in the Nov. 4 election.

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