The review of where and how to hold a Sept. 11 trial is not over, so no recommendation is yet before the president and Obama has not made a determination of his own, officials said. The review is not likely to be finished this week.
Officials spoke on condition of anonymity because they weren't authorized to discuss private deliberations.
The matter is at the White House after Attorney General Eric Holder decided in November to transfer Mohammed and the four other accused terrorists from the prison at the U.S. naval base at Guantanamo Bay, Cuba, to New York City for civilian trials. Initially supported by city officials, the idea was later opposed because of costs, security and logistical concerns.
When opposition ballooned further into Congress and an attempted Christmas airline bombing brought massive scrutiny to Obama's terrorism policies, the administration said it would review Holder's trial decision and consider all options for a new location.
Last month, moving the trial venue back outside of the U.S. mainland, or holding the trials under the guises of the U.S. military.
In addition to local opposition to a trial, the administration faces pressure on its goal of closing Guantanamo on another front. Republicans in Congress have proposed barring prosecutions of terrorism defendants in federal courts or in reformed military commissions located in the United States.
By conceding, the president hopes to get the support he needs to close Guantanamo. However, it also forces Mr. Obama to align himself with the Bush administration's views on terror trials, reports CBS News senior White House correspondent Bill Plante.
Republican Rep. Peter King has proposed legislation that would prevent the Obama administration from putting Mohammed and other terrorists on trial in any American community. Republican Sen. Lindsey Graham joined by about half the Senate's Republicans and a few Democrats, has made a similar proposal.
Separate from the internal trial review, the White House is in still-ongoing negotiations with lawmakers over those proposals, including how to secure funding from Congress to hold terrorism trials and to close the Guantanamo prison and replace it with another facility in the United States.
The Obama administration views civilian trials for terrorists as an important demonstration of the U.S. commitment to rule of law. Officials also have cited the numerous terrorism trials already held successfully in U.S. criminal courts.
Further, the administration argues that prosecutorial decisions are for the executive branch to make, not lawmakers.
The Washington Post first reported the near-recommendation of a military trial.
"If this stunning reversal comes to pass, President Obama will deal a death blow to his own Justice Department, not to mention American values," said American Civil Liberties Union Anthony D. Romero. "Even with recent improvements, the military commissions system is incapable of handling complicated terrorism cases and achieving reliable results. President Obama must not cave in to political pressure and fear-mongering. He should hold firm and keep these prosecutions in federal court, where they belong."