The court is expected to decide in August if the government can keep evicting rice farmers from a 4.2 million acre Indian reservation decreed by President Luiz Inacio Lula da Silva in 2005. The evictions were stopped in April when rice farmers started burning bridges and blockading roads, and justices said they feared a "veritable civil war."
The court's decision could help determine the future of the Amazon, whose remaining jungles provide a critical cushion against global warming. It could also redefine Brazil's policy toward its Indians at a time of frequent confrontations, as the country spends billions of dollars opening roads, building dams and promoting agribusiness across the world's largest remaining tropical wilderness.
Unlike in most other Latin American countries, where indigenous people are fighting for rights in mainstream society, most of Brazil's Indians continue to live in the jungle and maintain their languages and traditions. These Indians have fought for decades to keep or regain their ancestral lands.
Brazil's 1988 constitution declared that all Indian ancestral lands must be demarcated and turned over to tribes within five years. While that process has yet to be completed, today about 11 percent of Brazilian territory and nearly 22 percent of the Amazon is in Indian hands.
But as logging, ranching and farming expand into the Amazon, there has been increasing conflict with the Indians and pressure on the government to limit the size of reservations. Earlier this summer, government anthropologists revealed photos of one of the world's last uncontacted tribes fleeing logging near the Peruvian border. In May, Indians protesting a proposed hydroelectric dam on the Xingu River in Para state machete-slashed a government official who came to speak to the group.
Top military generals warn that too much land in Indian hands, especially along Brazil's borders, threatens national security and could lead to tribes unilaterally declaring themselves independent nations. They compare the situation to Kosovo, which broke away from Serbia in February.
At a raucous seminar on national sovereignty at Rio de Janeiro's Military Club, the head of Army's Amazon command, Gen. Augusto Heleno Pereira, attacked the federal government's indigenous policy as "regretful and chaotic." He even suggested that the army would refuse to remove the settlers.
"The Brazilian army does not serve the government but rather the Brazilian state," Pereira said.
Pereira's comments were characterized in the Brazilian media as possibly treasonous and he was called in to discuss them with country's Defense Minister Nelson Jobim. Both the Army and Defense Ministry later said the issue was resolved, without further comment.
The conflict is clear in Roraima, a sparsely populated northeastern state that borders Guyana and Venezuela, where the government in 2005 officially recognized the Raposa Serra do Sol Indian Reservation after long delays. The reservation was created to protect about 18,000 Indians from the Macuxi, Ingarico, Patamona, Wapixana and Taurpeng tribes who live in the area.
Some 3,500 people gathered to celebrate the new reservation three years ago, and were briefly stranded in the jungle when vandals set fire to a bridge. The violence has continued with each attempt to remove settlers.
"The question here is much bigger than the state of Roraima. It's a question of national integration," said rice farmer Paulo Cesar Quartiero, who has been jailed twice for resisting eviction - once for blocking a federal highway and again on weapons charges after his ranch hands shot and wounded 10 Indians.
Roraima state Gov. Jose de Ancieta has sued to stop the evictions, arguing that the reservation is strangling economic development in a state where 46 percent of the land is already in Indian hands. And many Brazilians - including some military leaders - are beginning to criticize the nation's indigenous policy as isolationist and even a threat to national sovereignty.
But Paulo Santilli of Brazil's National Indian Foundation says a court ruling in favor of the rice farmers would spell havoc in the Amazon, "not just on the part of Indians, but from land grabbers, prospectors and loggers who would take it as a signal that reservations could be invaded." Indians and their allies fear such a ruling would also allow judges to reduce the size of other already-established reservations.
"If they decide against us, it would be the worst thing that can happen to indigenous people across Brazil," said Macuxi chief Pedro Raposa da Silva. He added that angry Indians could carry out the evictions themselves if the court decides against them.
Officially, the government sides with the Indians.
"Those people (the settlers) think their contribution to the economy, and their control of the local institutions make them right," said Justice Minister Tarso Genro, who also oversees indigenous affairs. "They are mistaken."
But some Supreme Court justices already are indicating they don't agree.
"If we take the concept of prior occupation too far," said Supreme Court Justice Marco Aurelio Mello, "we will have to hand my marvelous city of Rio de Janeiro over to the Indians."