Obama and McCain battle in first debate

Mississippi: Democrat Barack Obama and Republican John McCain battled over spending, taxes and the Iraq war in their first debate on Friday, questioning each other's judgment and ability to lead on the biggest issues facing the United States.

In a 90-minute debate, McCain and Obama clashed over their economic and security approaches in heated exchanges that highlighted broad policy differences.

McCain questioned Obama's readiness for the White House. "I honestly don't believe that Senator Obama has the knowledge or experience, and has made the wrong judgments in a number of areas," McCain said during the debate at the University of Mississippi.

Obama repeatedly tied McCain to the policies of President George W. Bush and said both men had been too focused on Iraq and ignored other problems. "The next president has to have a broader strategic vision about all the challenges we face," he said.

Both candidates said they were optimistic Congress would come up with a $700 billion rescue plan for US financial institutions but agreed the huge price tag would limit their agendas as the next president.

McCain said he would freeze federal spending as president on most programmes other than defence and veterans' care, and accused Obama of being a big-spending liberal who could not bring together Republican and Democrats.

"Senator Obama has the most liberal voting record in the Senate," said McCain, who aggressively attacked Obama and at times put him on the defensive. "It's hard to reach across the aisle from that far to the left."

Obama said McCain would cut taxes for the wealthy and slash corporate tax rates, and said support of anti-regulatory approaches by Republicans like McCain had led to the collapse on Wall Street.

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.