T.G.
N.,
Wow, whatever IT was that set off this dispute is certainly between those two and should stay ONLY between the two. I agree with staying neutral in the situation, especially since it's clear you're still close to both. So, thinking of this rationally and fairly, take the high road and assume your father is too. Your father offered to host the graduation party knowing your sister is part of your family, and knowing that it's an "entire family" celebration. It would be selfish of him to expect you not to invite your sister, and you'd be taking sides if you don't invite your sister. So, personally I would say (before sending out invites), 'Thank you dad for offering to host, knowing that everyone in the family may come, including (your sister). I'm very touched and honored that you are putting your past differences aside for this very special occasion - this means a lot to me and (your daughter).' Then address the issue directly...'Because this is (your daughter's) day, are you sure you'll do everything you can to keep positive interactions between you and (your sister)?' If he says 'yes', then praise and thank him. If he says 'no' then for your child's sake you should consider a different location (no matter how wonderful your father's place is for a party). As adults, we have to remember the graduation is about YOUR DAUGHTER, not the adults. So if the attention is going to be all on your father and/or your sister because of the location and inability for those two to get along then you have to find a neutral location, invite both (advising each) and let them decide to come or not. It's their dispute, not your childs and not yours. If either have a problem with that you need to stand up for your child and the very special occasion.
Good luck and congratulations to your daughter!