US House and Senate negotiators unveiled a compromise military spending bill that ties strings to aid to Pakistan, targets Iran's central bank, and sets high hurdles for closing Guantanamo Bay.
The legislation, which was expected to face votes in both chambers this week, requires that Al-Qaeda fighters who plot or carry out attacks on US targets be held in military, not civilian, custody, subject to a presidential waiver.
The measure exempts US citizens from that fate, but leaves it to the US Supreme Court or future presidents to decide whether US nationals who sign on with al-Qaeda or affiliated groups may be held indefinitely without trial.
The negotiators, working to blend rival House of Representatives and Senate versions of a sweeping annual $662 billion defense bill, expressed hopes of having modified the detainee rules enough to avert a White House veto threat.
President Barack Obama had warned he could reject the bill over the required military custody of some suspected extremists as well as provisions he charged would short-circuit civilian trials for alleged terrorists.
"I just can't imagine that the president would veto this bill" given the changes made in the House-Senate compromise, said Senate Armed Services Committee Chairman Carl Levin, a Democrat.
Veteran Senator John McCain, the top Republican on Levin's panel, said the negotiators had met with key aides to Obama, including FBI Director Robert Mueller and top US Treasury Department officials.
"We feel that we were able to satisfy, we hope, most of their concerns," he said.
The lawmakers strengthened Obama's ability to waive parts of the detainee provisions and reaffirmed that the custody rules would not hamper ongoing criminal investigations by the FBI or other law enforcement organizations.
And they very slightly diluted the legislation's tough new sanctions on Iran, which aim to cut off Tehran's central bank from the global financial system in a bid to force the Islamic republic to freeze its suspect nuclear program.
"It does curtail Iran's ability to buy and sell petroleum through its central bank and prevents foreign financial institutions that deal with the central bank of Iran from continuing their access to the US financial system," said McCain.
"They are going to pay a bigger and bigger price should they continue to move towards nuclear weapons," said Levin.
The measure would freeze roughly $700 million in aid to Pakistan pending assurances that Islamabad has taken steps to thwart militants who use improvised explosive devices (IEDs) against US-led forces in Afghanistan.
"We've had some shaky relations lately with Pakistan. We need them, they need us," said House Armed Services Committee Chairman Buck McKeon, a Republican.
"But one of the things that has bothered me the most in this war in Afghanistan is the loss of life and limb to IEDs."
The measure forbids the transfer of Guantanamo Bay detainees to US soil and sharply restricts moving such prisoners to third countries -- steps that critics of the facility say will make it much harder to close down.
The legislation also calls for closer military ties with Georgia, including the sale of weapons that McCain said would help the country, which fought a brief war with Russia in 2008, defend itself.
And it included a measure, authored by McCain and Levin, to crack down on counterfeit electronics making their way from China into the Pentagon's supply chain, hurting the reliability of high-priced US weapons programs.