The same jury will decide next week if his co-defendant should be put to death for killing 11 people in the nearly simultaneous bombing in Tanzania.
After five days of deliberations, a federal court jury said Tuesday it could not agree on whether to impose the death penalty against Al-'Owhali, effectively sparing his life.
Al-'Owhali, 24, a follower of Saudi millionaire Osama bin Laden, received life in prison without parole for his role in the Aug. 7, 1998, attack in Nairobi.
In a lengthy "verdict sheet" used by the jurors to reach their decision, 10 members of the 12-person panel believed that killing Al-'Owhali might make him a martyr. Nine doubted it would relieve victims' pain.
When reached for comment, some victims disagreed:
"Justice was not served," said Ellen Bomer, a Huntsville, Ala., woman blinded by the Nairobi bombing, in which 12 Americans died.
None of the jurors was available to discuss the case. U.S. District Judge Leonard Sand will impose the sentence on Sept. 12.
Al-'Owhali rode in a bomb-hauling truck in Kenya and threw a stun grenade to distract embassy guards. His co-defendant, Khalfan Khamis Mohamed, 27, was convicted of helping build and deliver a bomb to the U.S. embassy in Dar es Salaam, Tanzania.
The same Manhattan jury is to begin hearing Mohamed's penalty case next Tuesday. His lawyer, David Ruhnke, hugged lawyers for Al-'Owhali after the jury's decision.
Al-'Owhali's life was spared one day after Oklahoma City bomber Timothy McVeigh became the first person executed by the federal government since 1963. Under a 1996 federal law, prosecutors can seek the death penalty in terrorst murder cases.
Defense attorney Frederick Cohn, noting the panel was told to avoid coverage of the McVeigh case, said he saw no connection between Monday's execution and the jury decision.
"This is an extraordinary victory for a system that was really put to the test," Cohn said. "I'm about as numb as my client."
Assistant U.S. Attorney Patrick Fitzgerald has indicated the penalty hearing for Mohamed will differ from Al-'Owhali in that it is to prominently feature the defendant's alleged role in the Nov. 1 maiming of a prison guard at New York's Metropolitan Correctional Center.
Last year, Mohamed allegedly was involved in a failed escape attempt when his cellmate stabbed a guard in the eye with a filed-down comb.
During Mohamed's trial, defense lawyers conceded their client had rented the house where the Tanzania bomb was built and helped grind TNT.
But in court papers, attorneys argued Mohamed should be spared death for giving the FBI "a complete and truthful statement of his role," acting "out of sincere religious belief," being remorseful, and "being improperly removed from South Africa" where he was arrested.
Minutes after the Al-'Owhali decision, Sand awarded lawyers for Mohamed a victory.
Sand said the jury could be told in a brief note that a South African court concluded Mohamed should not have been turned over to U.S. authorities without guarantees he would not face death.
Lawyer David Bruck, who represented Al-'Owhali in the early stages of the case, praised Tuesday's decision.
"Terrorists have already decided to become martyrs. This just dramatizes their cause. Life (in prison) is a long and terrible punishment," he said. "I think today the United States took a step toward rejoining the rest of the democratic world. We did not become the world's executioner."
Two other men, Wadih El-Hage, a naturalized U.S. citizen, and Mohamed Sadeek Odeh were also convicted of all charges in a 302-count indictment on May 29.
The indictment alleged the men conspired with others in bin Laden's organization, al-Qaeda, to attack Americans and pressure the United States to stay out of the Middle East.
El-Hage and Odeh both face life in prison.
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