Jurors considering whether senior White House officials should face criminal charges over the unmasking of a covert CIA operative have begun a key meeting.
Lawyers for the two White House aides deny any wrongdoing
Reports suggest Lewis Libby, a top aide to US Vice-President Dick Cheney, could be charged with lying to a grand jury.
Senior presidential adviser Karl Rove could escape immediate prosecution, but may face further investigations.
The identity of CIA agent Valerie Plame - whose husband criticised the Iraq war - was leaked to a US reporter in 2003.
Revealing the identity of a covert agent is a federal offence.
Special prosecutor Patrick Fitzgerald will hold a news conference at 1800 GMT on the status of his investigation.
He may yet end the inquiry with no charges and no further action.
There is also the possibility that he could seek to extend the term of the federal grand jury - which is due to expire on Friday - in order to gather more evidence against Mr Rove.
"The special counsel has advised Mr Rove that he has made no decision about whether or not to bring charges and that Mr Rove's status has not changed," Mr Rove's lawyer, Robert Luskin, said in a statement released as jurors met.
"Mr Rove will continue to cooperate fully with the special counsel's efforts to complete the investigation."
Mr Fitzgerald joined members of the grand jury at a Washington courthouse on Friday morning to discuss the case.
Ms Plame's identity was leaked after her husband, diplomat Joseph Wilson, accused the Bush administration of manipulating intelligence to support military action against Iraq.
Mr Wilson says it was done to undermine his credibility. Others have raised the possibility that it was a form of payback for her husband's criticism.
Decides if an alleged crime is worthy of a trial
Meets in secret
Typically has 25 members
Reports to a judge, who can extend its term
Used in some US states and to try certain major crimes
Both Mr Libby and Mr Rove spoke to reporters about the CIA operative in the summer of 2003.
But both have denied explicitly naming Ms Plame and deny any offence.
The New York Times reports that officials close to the investigation have suggested Mr Libby, who is chief of staff to Mr Cheney, will face perjury charges.
The Washington Post says he has begun to look for a lawyer in anticipation of the charge.
A two-year grand jury investigation has attempted to uncover how journalist Robert Novak was able to name Ms Plame in his syndicated newspaper column.
The White House had initially denied that either Mr Rove or Mr Libby was involved in the leak.
But the administration has since been forced onto the defensive as the pair were implicated.
Anyone indicted in this CIA probe is expected to resign immediately. Should either Mr Rove or Mr Libby be forced to leave, commentators say the Bush administration may lose its sense of direction.
Charges would certainly cap a bad week for the White House.
On Thursday the president accepted the withdrawal of his nomination for a post on the US Supreme Court, Harriet Miers, amid bi-partisan criticism of her candidacy.