Deputy Solicitor General Gregory Garre, representing the government, argued that letting the case go to trial, "would reveal the sources, methods and operational details" of government intelligence activities. The alleged monitoring is part of more rigorous surveillance practices put in motion after the terrorist attacks of 11 September, 2001.

After a two-and-a-half hour hearing, the US Court of Appeals for the 9th District, in San Francisco, said it will consider the dismissal motion as well as a one in a second lawsuit also challenging the NSA programme.

But Appeals Court judges Michael Daly Hawkins, Margaret McKeown and Harry Pregerson, peppered Garre with questions, challenging his argument that the state secrets privilege trumps the right of the plaintiffs to have their case heard.

Pregerson asked Garre how a court is to decide whether something the executive branch claims is a state secret is a secret, if the executive branch won't reveal what it claims is a secret.

"Who decides what's a state secret? Are we just a rubber stamp? We're just supposed to take the word of the executive?" Pregerson asked.

Garre responded that the court should give "the utmost deference" to the executive branch's claim that something is a state secret, but acknowledged that it is not an "absolute deference".

The EFF says that AT&T, at one of its offices in San Francisco, diverted internet traffic, including emails and Voice over IP (VoIP) phone calls, to a separate room in which NSA-authorised people monitored the network traffic. Robert Fram the attorney for EFF, said that just the act of diverting that traffic into a room controlled by the NSA proved their case against AT&T and that they would not have to try to risk violating the state secrets privilege by trying to disclose what was done with the information.

But Garre, in rebuttal, argued that if the surveillance done in that room was approved by a warrant, then there is no violation by the government or AT&T in diverting internet traffic to that surveillance room.

The second case is that of the Al-Haramain Islamic Foundation versus President George W. Bush, which claims the government engaged in warrantless surveillance of their organisation, in violation of its constitutional rights.

The appeals judges gave no indication when they might rule on the motion to dismiss. Lee Tien, an EFF staff attorney, said given the notoriety of the case, the judges could render a decision soon, but at the same time, given the gravity of the issues, they might take more time.

Retirement speculation has circulated since he forfeited the powerful speaker's post when Republicans lost control of the House in last year's elections. Hastert, 65, declined to run for minority leader, taking on a role as elder statesman among Republicans.

In his release, Hastert said his accomplishments as a congressman for his northern Illinois district and as House speaker weren't his own doing, but happened because of support from constituents, friends and colleagues.

"We worked together to pass legislation to provide a service or to meet the need or those we served," he said. "We fought for our beliefs and worked to improve our communities, our district and our country."

Hastert's retirement has local Democrats starting to boast they can win another congressional seat, even as the GOP vows it won't easily give up a seat it has held for two decades. Hastert was considered by many to be unbeatable in his northern Illinois district.

"Any Democrat thinking of getting into this race does so at his or her own peril," said National Republican Congressional Committee spokesman Ken Spain.

A Hastert vacancy is the second in Illinois that Republicans would have to contend with because retiring Rep. Ray LaHood is giving up a central Illinois congressional seat controlled by the GOP for nearly 90 years. LaHood will leave when his term ends in January 2009.

National Republicans "now have to defend another open seat in a blue state where the president is incredibly unpopular," said DCCC spokesman Doug Thornell.

Thornell said a race to replace Hastert would be a "a real opportunity" for Democrats in a "competitive district." The district stretches from Hastert's Plano home south of Chicago all the way to the Mississippi River.

Some local Democrats say they might snag Hastert's district away from Republicans because the populated areas are leaning more Democratic as people migrate there from the heavily Democratic city of Chicago in search of less expensive housing. They also point to last year's election, when two Democrats from Hastert's district won open seats in the Illinois Senate that had been held by Republicans.

"Times, they have a-changed," said state Sen. Michael Noland, one of those Democrats who now represents the Elgin area west of Chicago.

President Bush carried the district in 2004 with 55 percent of the vote.

Woodbury admitted fatally shooting James Walker, manager of the Army Barracks outdoors gear store in Conway, on July 2, along with two customers, William Jones, 25, and his friend Gary Jones, 23.

Woodbury gave short answers in Merrimack County Superior Court as Fitzgerald and public defender Caroline Smith reviewed his history of mental problems, including bipolar disease, and his understanding of the process and his options.

"I'm pleading guilty because I am guilty," he said.

He apologized to each victim by name, and to their families.

But Walker's father, also named James, told him, "You are a coward, a thief and a cold-blooded murderer."

Woodbury, of Windham, Maine, was released May 4 from the Maine State Prison after serving five years for robbery and theft. Authorities say he left the state a month later, heading south with two teenage sisters in a car allegedly stolen from their mother.

Woodbury is accused of robbing a bank in Florence, S.C., on June 6; breaking into a million-dollar home in St. Simons Island, Ga., and then setting it on fire June 12; and holding up a clothing store June 19 in Chattanooga, Tenn., wielding a knife in a scuffle with the shop owner's son before escaping.

Both sisters eventually broke away from Woodbury, one of them hiding from him in a gas station restroom the day before the Chattanooga robbery.

After his arrest for the murders, Woodbury told authorities he thought Walker, 34, was reaching for a weapon, so he shot him. He said he then shot the other two men because they got in his way. Relatives said William Jones of Walpole, Mass., and Gary Jones, of Halifax, Mass., were not related but were as close as brothers.

Woodbury complained after his arrest that he had warned prison officials in Maine he would be a danger.

"I reached out, asking for help. I reached out and told them I need medication. I reached out and told them I shouldn't be out in society. I told numerous cops, numerous guards," Woodbury told reporters outside a courthouse on July 5.

Maine authorities said Woodbury had access to a wide variety of mental health services.

When the judge declined to let Woodbury speak a second time on Friday, he scribbled a sign and pointed it toward the family members. "U have a lawsuit," it said.

A relative of one victim had said Woodbury pleaded guilty in order to choose his prison, but Jeffery Strelzin, head of the criminal division in the Attorney General's Office, said Woodbury was promised nothing in return for his plea.

Before being sentenced, Tocchet told Burlington County Superior Court Judge Thomas S. Smith: "I'm sorry to the court, my family and friends I was involved in this."

Tocchet, 43, partnered with former New Jersey state trooper James Harney and another man in a sports betting venture they ran for five years.

Harney, who pleaded guilty on Aug. 3, 2006, was sentenced two weeks ago to five years in jail. He could be eligible for parole in about a year. Tocchet remains on indefinite leave from his job with the Coyotes.

Dura Automotive Systems Inc. has received U.S. Bankruptcy Court approval for the $160.2 million sale of its Atwood Mobile Products unit and an equity plan with Pacificor LLC to support its reorganization.

Dura, which filed for bankruptcy in October 2006 in Delaware, announced the approvals late on Wednesday. It expects to emerge from court protection in the fourth quarter.

The agreement with Pacificor provides a $140 million to $160 million commitment and would make Dura a privately held company upon its emergence from Chapter 11, with protections for minority shareholders, Dura said.

Several parties objected to an earlier equity plan led by Pacificor, but Dura filed an amended agreement earlier this week to address the objections.

Private equity firm Insight Equity is acquiring the Atwood unit from Rochester Hills, Michigan-based Dura. Atwood is based in Elkhart, Indiana.

"Is it the government's position that when our country is engaged in a war that the power of the executive when it comes to wiretapping is unchecked?" Judge Harry Pregerson asked a government lawyer in a tone of incredulity and frustration.

Gregory G. Garre, a deputy solicitor general representing the administration, responded that the courts have a role, though a limited one, in assessing the government's assertion of the so-called state secrets privilege, which can require the dismissal of suits that could engender national security. Judges, he said, must give executive branch determinations "utmost deference."

"Litigating this action could result in exceptionally grave harm to the national security of the United States," Garre said, referring to the assessment of intelligence officials.

The three judges, on the 9th U.S. Circuit Court of Appeals, were hearing arguments in two combined lawsuits challenging the highly classified surveillance programs, which the administration said were essential in combatting international terrorism. The appeals were the first to reach the court after dozens of suits against the government and telecommunications companies over NSA surveillance were consolidated last year before the chief judge of the federal trial court here, Judge Vaughn R. Walker.

The appeals concern two related questions that must be answered before the merits of the challenge can be considered: whether the plaintiffs can clearly establish that they have been injured by the programs, giving them standing to sue; and whether the so-called state-secrets privilege requires dismissal of the suits on national security grounds.

Though the questions are preliminary, the impact of the appeals court's ruling may be quite broad. Should it rule for the government on either ground, the legality of the NSA programs may never be adjudicated.

All three judges — appointed by Democratic presidents — indicated that they were inclined to allow one or both cases to go forward for at least limited additional proceedings before Walker.

The two cases deal with different secret programs, but are broadly similar. One, a class action against AT&T, focuses mainly on allegations that the company provided the NSA with its customers' phone and Internet communications for a vast data-mining operation. The lawyers in the AT&T case call that program, which the government has not acknowledged, a "content dragnet."

The second case, brought by an Islamic charity and two of its lawyers against the government, concerns a targeted program which the Bush administration calls the Terrorist Surveillance Program. The program, which has since been submitted to a secret court's supervision, bypassed court warrants to monitor international communications involving people in the United States.