Four Muslim converts accused of plotting to blow up New York synagogues and shoot down US military planes could be freed in a matter of weeks.
The trial of the men, from Newburgh, New York, stalled last week after prosecutors released a report by a federal agent saying that the men never posed a threat.
Judge Colleen McMahon berated prosecutors for not releasing the information earlier and ordered federal lawyers to scour records for similar documents, a process prosecutors say could take months.
The four men, James Cromitie, 44, Onta Williams, 32, David Williams, 28, and Laguerre Payen, 27, were arrested last May.
They were caught planting what they thought were bombs outside two synagogues in the Bronx and accused of preparing to shoot what they believed to be a stinger missile at aircraft at New York State's Stewart Air National Guard base.
However, the weapons turned out to be dummies supplied by a Pakistani-born government informant, Shaheed Hussain.
Defence attorneys claim their clients were entrapped by Mr Hussain who, they say, devised the plot, supplied the equipment, prepared the phony
devices and lured the men with offers of up to $250,000 and a new BMW car.
The prosecution claims that Mr Cromitie instigated the plan.
Because the four accused have been in jail for more than a year, Judge McMahon held a bail hearing this week to consider whether to release them while prosecutors comb records for more documents that could be of interest to the defence.
During Monday's bail hearing, the defendants' lawyers claimed their clients were inept, with no knowledge of explosives and just half an hour's practice at firing a missile.
The prosecution argued that the intent to commit an act of terrorism was real.
Judge McMahon is expected to rule on the bail application later this week.
Meanwhile, the judge has asked lawyers for both sides to submit written statements about why the prosecution should or should not continue. Those statements are due by next Friday.
David Winter, executive director of Riverdale Jewish Centre, one of the synagogues targeted in the alleged attack, said that he hoped the Justice Department will get "the best result possible".
He said: "I hope these men will be punished to some extent. Whether they were framed or not framed, there was hate in their hearts and they wanted to do damage."