Democrats blasted the administration for not acting sooner, while Republicans contended the Democrats' plans would make it too difficult to prosecute terrorists.
The policy, outlined in a new Defense Department memo and congressional testimony, reflects the recent 5-3 Supreme Court decision blocking military tribunals set up by President Bush. The court ruled that the secret tribunals, established by Bush to try suspected terrorists, do not obey international law and had not been authorized by Congress.
CBS News legal analyst Andrew Cohen said the announcement is an about-face ordered in response to the recent Supreme Court decision. He called it "a reversal of policy."
The ruling opened the door for Congress to pass legislation on where and how military detainees could be prosecuted. The Senate is expected to take up legislation addressing the legal rights of suspected terrorists after the August recess.
Click here to read the Department of Defense memo.
But a Pentagon lawyer told the Senate Judiciary Committee on Tuesday that whatever new procedures are adopted for prosecuting members of al Qaeda, there's no way al Qaeda members are going to have the same legal rights as common criminals, CBS News correspondent David Martin reports.
"It is simply not feasible, in time of war, to gather evidence in a manner that meets strict criminal procedural requirements," Deputy General Counsel Daniel J. Dell'Orto said.
The Supreme Court decision rankled many conservatives who have long maintained that the president does not need permission from Congress to detain indefinitely enemy combatants captured on the battlefield.
Although the Bush administration lost the battle over whether the Geneva Convention should apply to members of al Qaeda, the fight over exactly what legal rights they're entitled to is just beginning, Martin reports. Finding a legislative solution to the Supreme Court ruling is "not going to be easy because some of the suggestions on the other side would make it almost impossible to not disclose classified information and in some ways make hearsay evidence unavailable," said Sen. Orrin Hatch, R-Utah, a member of the Judiciary Committee.
Hatch and other conservatives, along with the Bush administration, have said they would oppose prosecuting terror suspects using the military's court-martial system because it could expose sensitive information and hinder interrogations. The system also would prohibit hearsay evidence, which they contend is necessary for convictions of terrorists and common in international military tribunals.
The principal deputy general counsel of the Department of Defense told senators that detainees in Guantanamo are already being treated in accordance with Article 3 of the Geneva Conventions, which specifies how prisoners must be treated, CBS News correspondent Bob Fuss reports.
Democrats say they have largely been shut out of meetings with administration officials on the issue and are frustrated with the White House decision not to prosecute detainees using the existing court-martial system.
Sen. Patrick J. Leahy of Vermont, the top Democrat on the Senate Judiciary Committee, said the court decision "has given our system of constitutional checks and balances a tonic that was sorely needed."
"We need to know why we are being asked to deviate from rules for courts-martial," Leahy said.