Asheville: Democratic presidential hopeful Barack Obama on Sunday retaliated against Republican tactics by claiming that McCain was more concerned in a launching a smear campaign than rather than mending the US economy.

With McCain losing ground in opinion polls, a campaign strategist was quoted as saying the Republican presidential candidate needed to "turn the page" on the economic issue and make the election about Obama's experience and character.

That effort started on Saturday when Republican vice presidential candidate Sarah Palin accused Obama of "palling around with terrorists" in reference to his acquaintance with Bill Ayers, a former member of the Vietnam War-era militant Weather Underground.


"Senator McCain and his operatives are gambling that he can distract you with smears rather than talk to you about substance," Obama responded at a rally in Asheville, North Carolina, a swing state where he was preparing for his second debate with McCain on Tuesday.

"They'd rather try to tear our campaign down than lift this country up," the Democratic presidential candidate said.

"It's what you do when you're out of touch, out of ideas and running out of time," Obama told a crowd of 20,000 attending the rally one month from the Nov. 4 election.

Obama's improvement in the polls has been fuelled by the public's perception that he can best handle the ailing economy. The Illinois senator kept the focus on the economy and used the "turn the page" quote as a way of keeping the issue alive.

"We're facing the worst economic crisis since the Great Depression, and John McCain wants us to 'turn the page?'" Obama said.

"Well, I know the policies he's supported these past eight years and wants to continue are pretty hard to defend. I can understand why Senator McCain would want to 'turn the page' and ignore this economy."

Then he poked fun at Palin's folksy way of speaking by saying: "We're not going to let John McCain distract us. We're not going to let him hoodwink ya, and bamboozle ya, we're not going to let him run the okie doke on ya."

The Obama campaign unveiled an ad hitting McCain as one of the "Keating Five" senators who met federal regulators on behalf of a California savings and loan institution that collapsed in 1989. The ad faults McCain as unwilling to regulate the financial industry.