WASHINGTON, 13 August 2004 — The US government, which has held Yaser Esam Hamdi incommunicado in a Navy brig for two years without charges, much of the time without a lawyer, indicated Wednesday that it is nearing a deal that would free him altogether.

The government is negotiating with Hamdi’s lawyers about “terms and conditions acceptable to both parties that would allow Mr. Hamdi to be released from...custody,” according to documents filed in federal court in Norfolk, Virginia, The legal papers, submitted jointly by federal prosecutors and Hamdi’s attorneys, asked the court to stay all proceedings for 21 days while negotiations continue.

Terms of the release are still being hammered out but, according to people familiar with the situation, are likely to include that Hamdi renounce his US citizenship, move to Saudi Arabia and accept some travel restrictions, as well as some monitoring by Saudi officials. In addition, he may agree not to sue the federal government over whether his civil rights were violated.

US District Judge Robert Doumar in Norfolk has yet to rule on the request for a stay.

Hamdi was captured alongside pro-Taleban forces on the battlefield in northern Afghanistan in November 2001 and taken to the US military prison in Guantanamo Bay, Cuba. There he told investigators that he was born in Louisiana to Saudi parents. He subsequently spent most of his life in Saudi Arabia, but according to his family never renounced his US citizenship.

Hamdi was moved to the Navy jail at Charleston, S.C., in April 2002 and has been held there since then as an “enemy combatant.” The government has never brought charges against him.

In June, the Supreme Court ruled that as a US citizen, Hamdi must have access to the US legal system. Eight justices — all but Clarence Thomas — rejected the Bush administration’s contention that the federal courts could exercise no supervision over such a case.

“We have long since made clear that a state of war is not a blank check for the President when it comes to the rights of the Nation’s citizens,” Justice Sandra Day O’Connor wrote in a passage of the ruling that seemed to summarize the dominant view of the court.

The indication that Hamdi might be released soon is “a huge embarrassment for the administration,” said Michael Greenberger, a Justice Department official in the Clinton administration who is now a professor of law at the University of Maryland.

“I think it’s a bombshell,” agreed Eugene Fidell, a Washington lawyer who specializes in military issues. “I think it’s the type of thing that gets judges very, very upset,” especially after the government had argued vigorously for more than two years to hold Hamdi, he said.

Frank Dunham, the federal public defender who represents Hamdi, said the filing indicates that the negotiations over Hamdi’s possible release “have reached the point where they’re serious enough that both sides feel it’s worth going into court and suggesting that maybe nothing ought to happen for a short period of time.”

Dunham would not say how likely it is that Hamdi would actually be freed but added that he feels the government “is operating in good faith and with a certain element of common sense.”

The only other US citizen being held as an “enemy combatant” is Jose Padilla, who was arrested in May 2002 at Chicago’s O’Hare Airport and has been accused of plotting to set off a radiological bomb in the United States and blow up apartment buildings here.

The Justice official said that it was possible to discuss releasing Hamdi if he “no longer has intelligence value or is no longer a threat to national security.”

“It’s been three years, and it’s a different time,” said the Justice official, who spoke only on the condition that fuller identification not be used. “So it is appropriate to look at the options.”

But some experts in national security law dismissed that view. “I think that’s cosmetic,” said Scott Silliman, director of Duke University’s Center for Law, Ethics and National Security.

“I think what they’re doing is saying that Hamdi...is a case we just want to move off the headlines and dockets.”