Advocates had been optimistic that the Democratic-controlled White House and Congress could overcome objections to repeal of the law barring gays from serving openly in the military. The move is unpopular among Republicans, military officers and social conservatives.
But in the end, Senate Democrats were expected to fall at least one vote short of the 60 needed to limit debate and advance the legislation.
Maine Republican Sen. Susan Collins, the only Republican to support repealing the law and widely seen as the crucial 60th vote, announced Tuesday that she would not support advancing the bill because Democrats wouldn't allow the Republicans sufficient leeway to offer amendments.
Now, gay rights advocates say they worry they have lost a crucial opportunity to change the law. If Democrats lose seats in the upcoming elections this fall, repealing the law will prove even more difficult - if not impossible - next year.
"The whole thing is a political train wreck," said Richard Socarides, a former White House adviser on gay rights during the Clinton administration.
Socarides said President Barack Obama "badly miscalculated" the Pentagon's support for repeal, while Democrats made only a "token effort" to advance the bill.
"If it was a priority for the Democratic leadership, they would get a clean vote on this," he said.
Senate Democrats attached the repeal provision to a bill authorizing $726 billion in military spending next year. With little time left for debate before this fall's congressional elections, the bill received little attention until gay rights groups backed by pop star Lady Gaga began an aggressive push to turn it into an election issue.
Senate Majority Leader Harry Reid, D-Nev., gave Republicans the chance to offer only one amendment to address GOP objections on the military's policy on gays.
Collins said she planned to vote against advancing the bill unless Democrats agree to extend debate so that her colleagues could weigh in on other issues.
Jim Manley, a spokesman for Reid, said the senator would be willing to allow more debate on the bill after the November elections.
But "today's vote isn't about an arcane Senate procedures," he said. "It's about a GOP's pattern of obstructing debate on policies important to the American people."
An estimated 13,000 people have been discharged under the law since its inception in 1993. Although most dismissals have resulted from gay service members outing themselves, gay rights' groups say it has been used by vindictive co-workers to drum out troops who never made their sexuality an issue.
Top defense leaders, including Secretary Robert Gates and Chairman of the Joint Chiefs of Staff Adm. Mike Mullen, have said they support a repeal but want to move slowly to ensure changes won't hurt morale.
Gates has asked Congress not to act until the military finishes a study, due Dec. 1, on how to lift the ban without causing problems.
He also has said he could live with the proposed legislation because it would postpone implementation until 60 days after the Pentagon completes its review and the president certifies that repeal won't hurt morale, recruiting or retention.
In another blow to the bill, Obama's pick to lead the Marine Corps told a Senate panel on Tuesday that he worried that changing the policy would serve as a "distraction" to Marines fighting in Afghanistan.
"My primary concern with proposed repeal is the potential disruption to cohesion that may be caused by significant change during a period of extended combat operations," Gen. James Amos said in a written statement provided to the panel for his confirmation hearing.
During one exchange with Sen. Jeff Sessions, R-Ala., Amos said he would implement any changes in the law on gay service made by Congress. He said the Marine Corps would rely on discipline and leadership to ensure order, but that he didn't envision a gag order on troops who disagreed with revoking the ban.
Some Republicans have suggested they fear troops who openly oppose gay service would be punished for speaking out.
"I don't see this as a racist issue," Amos said. "I see this as an anxious issue ... because we don't have the answers yet."