RICHMOND, Va. – A federal appeals court here grappled yesterday with one of President Bush’s most aggressive moves in the war on terror – the use of the military to detain an American citizen captured on American soil while allegedly in the service of Al Qaeda.

A three-judge panel from the 4th Circuit spent more than an hour hearing arguments in the case of Jose Padilla, 34, a Brooklyn native who was arrested at O’Hare Airport in Chicago in May 2002. According to the government, Padilla plotted to detonate a radiation laden explosive, sometimes called a “dirty bomb,” in an American city.

Despite the grave allegations, no criminal charges were ever brought against Padilla. The government held him briefly in New York as a witness and then placed him in military custody as an enemy combatant. He is presently in a Navy brig in South Carolina.

“I may be the first lawyer to stand here and say, ‘I’m asking for my client to be indicted by a federal grand jury,'” one of Padilla’s attorneys, Andrew Patel, told the judges.

In an indication of the importance the Bush administration attaches to the Padilla case, the government’s arguments were presented by the solicitor general, Paul Clement, who usually appears before the Supreme Court.

Much of the hearing was devoted to the impact of two Supreme Court cases. One was a decision last year that granted a court hearing to an American citizen captured during the fighting in Afghanistan, Yaser Hamdi, but generally upheld the government’s right to detain him. The other was a 1942 case in which the court upheld the use of a military tribunal to try Nazi saboteurs, including an American, who landed on a beach in Long Island.

“You captured Padilla here in a Manhattan jail cell,” Judge M. Blane Michael told Mr. Clement. “I don’t see that you’ve cited us to anything out of the laws of war that would authorize a non-battlefield capture.”

Judge Michael suggested that the “use of force” resolution that Congress passed a week after the September 11, 2001, attacks didn’t apply within America’s borders.

Mr. Clement called that conclusion “very perverse,” noting that the 2001 strikes involved domestic targets. “In the context of this war, I don’t think there’s really a difference,” he said.

Another judge on the panel, J. Michael Luttig, ridiculed Mr. Patel’s argument that the president could not use the military to detain potential terrorists in America. “We might as well not have a president of the United States if in the circumstances I described to you, his hands were tied behind his back,” the judge said.

Judge Luttig, who was being discussed as recently as yesterday as a potential Supreme Court nominee, clearly favored the government. Judge Michael appeared to lean in Padilla’s favor. However, the third judge on the panel, William Traxler Jr., was harder to read. His brief questions seemed to be pro-government but betrayed no clear view of the case.

Padilla’s attorneys first challenged his detention in New York, where he was held for a few weeks before being moved to the Navy brig. The 2nd Circuit ruled in Padilla’s favor, but last year the Supreme Court ruled 5-4 that the petition should have been brought in South Carolina. A new case was filed there and, in May, another judge ruled that Padilla’s military detention was unlawful.