Richmond, Va. ? A divided panel from a conservative federal appeals court delivered a harsh rebuke to the Bush administration’s anti-terrorism strategy Monday, ruling that U.S. residents cannot be locked up indefinitely as “enemy combatants” without being charged.

The three-judge panel of the 4th U.S. Circuit Court of Appeals ruled that the government should charge Ali al-Marri, a legal U.S. resident and the only suspected enemy combatant on American soil, or release him from military custody.

The federal Military Commissions Act doesn’t strip al-Marri of his constitutional right to challenge his accusers in court, the judges found in Monday’s 2-1 decision.

“Put simply, the Constitution does not allow the president to order the military to seize civilians residing within the United States and then detain them indefinitely without criminal process, and this is so even if he calls them ‘enemy combatants,”‘ the court said.

Such detention “would have disastrous consequences for the Constitution – and the country,” Judge Diana G. Motz wrote in the majority opinion, which was joined by Judge Roger Gregory. Judge Henry E. Hudson, a federal judge in Richmond, dissented.

“This is a landmark victory for the rule of law and a defeat for unchecked executive power,” al-Marri’s lawyer, Jonathan Hafetz, said in a statement. “It affirms the basic constitutional rights of all individuals – citizens and immigrants – in the United States.”

The government intends to ask the full 4th Circuit to hear the case, Justice Department spokesman Dean Boyd said.

“The president has made clear that he intends to use all available tools at his disposal to protect Americans from further al-Qaida attack, including the capture and detention of al-Qaida agents who enter our borders,” Boyd said in a statement.

The court said its ruling doesn’t mean al-Marri should be set free. Instead, he can be returned to the civilian court system and tried on criminal charges.