Seven Alaska state employees have backed down and agreed to testify in an abuse-of-power investigation into Republican vice presidential nominee Sarah Palin.

But state governor Palin and her husband Todd are still expected to refuse to give evidence in the case, which has dogged her for months and could hurt John McCain in the final weeks of his presidential race.

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Palin is the focus of an inquiry into 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 would not fire the governor's former brother-in-law, but Palin contends he was dismissed for insubordination.

The McCain team insists Monegan a "rogue" who repeatedly tried to work outside normal channels for requesting money.

State employees subpoenaed

Lawmakers subpoenaed seven state employees to testify in the inquiry but they challenged those subpoenas.

After a judge rejected a similar challenge brought by state lawmakers last week, the employees decided to testify, Alaska Attorney General Talis Colberg said.

Democratic state Senator Hollis French, who is managing the investigation, said that, following the court ruling, he again asked Palin and her husband, Todd, whether they planned to testify.

"We've had no response," French said.

Palin says the legislative inquiry has become too political and she believes that only the state's personnel board should oversee the inquiry. Palin has the authority to fire the members of that board.

Alaska's Supreme Court, meanwhile, is considering whether to block the findings of the legislative inquiry.

The high court scheduled arguments for Wednesday over whether the case is being manipulated to hurt Palin before Election Day on November 4.

The independent investigator conducting the probe plans to turn over his conclusions on the case by next Friday to the Legislative Council, the body that authorised it.