Realistic representation of the land surface is crucial in global climate modeling (GCM). Recently, the Mosaic land-surface Model (LSM) has been driven off-line using GEOS DAS (Goddard Earth Observing System Data Assimilation System) atmospheric forcing, forming the Off-line Land-surface Global Assimilation (OLGA) system. This system provides a computationally efficient test bed for land surface data assimilation. Here, we validate the OLGA simulation of surface processes and the assimilation of ISCCP surface temperatures. Another component of this study as the incorporation of the Physical-space Statistical Analysis System (PSAS) into OLGA, in order to assimilate surface temperature observations from the International Satellite Cloud Climatology Project (ISCCP). To counteract the subsequent forcing of the analyzed skin temperature back to the initial state following the analysis. incremental bias correction (IBC) was included in the assimilation. The IBC scheme effectively removed the time mean bias, but did not remove him in the mean diurnal cycle. Therefore, a diurnal him correction (DBC) scheme was developed, where the time-dependent bias was modeled with a sine wave parameterization. In addition, quality control of the ISCCP data and anisotropic temperature correction were implemented in PSAS. Preliminary results showed a substantial impact from the inclusion of PSAS and DBC that was visible in the surface meteorology fields and energy budget. Also, the monthly mean diurnal cycle from the experiment closely matched the diurnal cycle from the observations.