US President George W Bush has reached a deal with Republican senators on a controversial bill setting rules for the questioning of terror suspects.
Harsh interrogation techniques have attracted criticism
Under the deal, Mr Bush dropped his demand that CIA interrogators be protected from prosecution by redefining the Geneva conventions.
The compromise will also allow the Bush administration to resume military tribunals, suspended since June.
Rebel John McCain said Mr Bush now had tools needed for the "war on terror".
Last week a Senate committee backed a milder bill granting broader protection to suspects.
Former Secretary of State Colin Powell backed Republicans opposing the measure sponsored by Mr Bush, saying that the international community was beginning to doubt the moral basis of the war on terror.
President Bush said the agreement would preserve a programme that would "help us crack the terror network to save American lives".
"I'm pleased to say that this agreement preserves the ... most potent tool we have in protecting America and foiling terrorist attacks, and that is the CIA programme to question the world's most dangerous terrorists and to get their secrets," he said.
Correspondents say a deal was probably reached in part because a split within the party risked damaging its prospects in November's mid-term elections.
There were concessions on both sides, but the White House appears to have backed down on two key issues.
Firstly, rebel Republicans had demanded a provision making it clear that torture of suspects would be barred.
They said Mr Bush's original proposals would effectively redefine the Geneva Conventions to allow harsh treatment of detainees held at the Guantanamo Bay camp in Cuba.
Some 460 suspects are believed to be held at the highly criticised detention centre.
The rebels also argued that the legislation could put Americans at risk of similar mistreatment.
An adjustment to the domestic War Crimes Act outlining "grave breaches" of the Geneva Convention will now set out what the CIA can and cannot do.
These breaches include torture and other forms of assault and mental stress, but the agreement does not mention specific interrogation techniques which would be banned.
Rules on evidence
The deal will also allow for military tribunals to try some of the terror suspects held at Guantanamo Bay.
But in a second key concession by the administration, they will now see all the evidence the jury sees, including some classified material once it has been stripped of the most sensitive details.
Stricter rules have been put in place on obtaining evidence through coercion, and evidence obtained through torture has been barred.
Mr Bush said he hoped Congress would send him the legislation before it concludes its business next week.
In June, the US Supreme Court ruled that the administration did not have the authority to try terrorism suspects by military tribunal, forcing the president to seek Congressional approval.