The three-judge panel unanimously found that the case of Salim Ahmed Hamdan should move forward under rules set by the Pentagon, a significant victory for the Bush administration's controversial policies in the war on terrorism.

In its ruling, the panel sided with the administration's claim that Hamdan and the other 14 terrorist suspects slated for trial by the military commissions do not qualify for prisoner of war status and protections under the Geneva Conventions, which govern the rights of prisoners of war.

"The president found that Hamdan was not a prisoner of war under the convention," Judge A. Raymond Randolph wrote for the panel. "Nothing in the regulations, and nothing Hamdan argues, suggests that the president is not a `competent authority' for these purposes."

Neal Katyal, an attorney for Hamdan, attacked the ruling, claiming it ignored "200 years of constitutional law.

"Today's ruling places absolute trust in the president, unchecked by the Constitution, statutes of Congress, and longstanding treaties ratified by the Senate of the United States," Katyal said. "It gives the president the raw authority to expand military tribunals without limit, threatening the system of international law and armed conflict worldwide."

Atty. Gen. Alberto Gonzales praised the decision as an affirmation of President Bush's "authority to establish military commissions to try and punish enemy combatants who have violated the laws of war."

Hamdan, who is in his mid-30s and is from Yemen, is charged with conspiracy to commit war crimes, murder and terrorism. He has acknowledged being a driver for bin Laden, but maintains he is not a member of Al Qaeda and that he is innocent of terrorism and other charges. He was captured in Afghanistan in November 2001.

Hamdan's trial before a tribunal began last August but was halted when U.S. District Judge James Robertson ruled that Hamdan could not be tried unless a "competent tribunal" found that he was not covered by the Geneva Convention.

In its ruling Friday, the appellate court said that Congress gave Bush the authority to set up the military commissions and that they were competent to decide whether Hamdan should receive Geneva Conventions protections.

Randolph and U.S. Circuit Appeals Court Judges John Roberts and Stephen Williams also ruled that the Uniform Code of Military Justice that governs military legal proceedings "imposes only minimal restrictions upon the form and function of military commissions," and does not prohibit the proceedings at the U.S. naval base at Guantanamo Bay, Cuba.

But Katyal said, "It's quite an odd holding. Historically military commissions have always been confined by the rules of courts-martial. Here they are just saying, `Well, those rules can be disregarded by the president if he sees fit.'"

Katyal said he would appeal the decision, either to the full U.S. Court of Appeals for the District of Columbia or directly to the Supreme Court.

In a concurring opinion, Williams wrote that one section of the Geneva Conventions should apply, Article 3 of the protocols, which compels captors to ensure that prisoners receive "humane treatment" and "the judicial guarantees which are recognized as indispensable by civilized peoples."

Eugene Fidell, president of the National Institute for Military Justice and a critic of the government's handling of enemy combatants, said the Supreme Court ultimately would decide the case.

"This will be next year's major global war on terror event at the Supreme Court," Fidell said. "This is not some amorphous case that arose out of appropriate or inappropriate conduct in Afghanistan. This is about somebody arrested in Afghanistan, and what are his rights?"

A year ago, the Supreme Court ruled that Guantanamo Bay prisoners are entitled to challenge their detention.

As a result the ruling, that recourse would be available to Hamdan only after his military commission trial, if at all.

The decision does not bode well for another 60 or so Guantanamo detainees who have petitioned U.S. courts to force the government to justify their detentions.

If other courts accept that detainees are not protected by the Geneva Conventions, the military could keep Guantanamo inmates out of reach of U.S. courts for lengthier periods, said Kristine Husky, an attorney for 11 Kuwaitis detained there.

"The ruling that the Geneva Conventions don't apply is going to be hard to get around," Huskey said.

About 520 people are held at Guantanamo Bay, many of them suspected members of Al Qaeda or the Taliban, which ruled Afghanistan before U.S. forces invaded the country in the months after the Sept. 11 attacks.

Since January 2002, when the Guantanamo base began receiving terror war detainees, about 200 inmates have been transferred to other countries or released without charges.