Indonesian terrorist Hambali, who has been held at Guantanamo Bay for the past 10 years, will remain there indefinitely as the US authorities still consider him a high risk.
The Periodic Review Board, tasked with cutting the number of inmates at the facility, rejected his appeal for release on Tuesday, saying in a statement that he continues to be a "significant threat to the security of the United States".
A US Defence Department communique seen by The Straits Times yesterday said the 52-year-old, whose real name is Riduan Isamuddin, "is likely to pose a threat to the US, its interests and allies".
In its recommendation to the review board, the department said that if released, Hambali would "probably seek out prior associates and re-engage in hostilities and extremists support activities".
Hambali's lawyer Carlos Warner called the review a sham, saying he was not able to participate in the hearing in a "meaningful way".
The US decision is welcome news to governments in South-east Asia.
Indonesia and Malaysia both expressed concern in recent months that the former operations chief of the Jemaah Islamiah (JI) terror network may be repatriated if President Barack Obama shuts down the detention camp.
Mr Obama said earlier this year that he planned to close the facility, set up in the wake of the Sept 11, 2001 terror attacks in the US.
The Malaysian government said in August that Hambali, who is also a former Al-Qaeda leader, remains a security threat to the region.
Malaysian Deputy Home Affairs Minister Nur Jazlan Mohamed said Hambali's return could "bring a new dawn" for regional terrorist groups looking for a capable leader.
He added that Hambali was "a star attraction" to such groups because of his Al-Qaeda ties and as he was a key figure in the regional terror network.
Indonesian officials have also told The Straits Times that if Hambali were to be released, they would be reluctant to accept his repatriation for fear that his return could spark a revival among domestic terror cells.
When asked for his view on the latest development yesterday, Coordinating Minister for Political, Legal and Security Affairs, Mr Wiranto, declined to comment.
The US Central Intelligence Agency once referred to Hambali as South-east Asia's Osama bin Laden. He is believed to have masterminded the 2002 Bali bombings, which killed 202 people.
The attack, targeted at nightclubs in the tourist district of Kuta and the US consulate in Denpasar, remains the deadliest terror attack on Indonesian soil.
Hambali was captured in Bangkok on Aug 14, 2003 in a joint US-Thai operation and transferred to Guantanamo on Sept 4, 2006.
He was never formally charged with any crime but remains wanted by Malaysia, Singapore and the Philippines in connection with terrorism activities.
Among the cases he is linked to is a meeting which he helped arrange between two of the Sept 11, 2001 hijackers and Al-Qaeda figures in Malaysia in 2000.
In December 2001, 15 JI operatives were arrested in Singapore for planning attacks on government buildings, embassies and US servicemen in the Republic.
Hambali later called for a meeting of other JI operatives in Bangkok and ordered attacks on soft targets frequented by Westerners. That was when the plan to attack Bali in 2002 was hatched.