Washington - Assets seized from the Iraq government should be used to rebuild the county and not to compensate 17 Americans held captive in Iraq during the 1991 Persian Gulf War, Justice Department lawyers told a judge Tuesday.

Attorneys for the former prisoners of war argued that a 1996 federal law should give them access to the money.

The case before U.S. District Judge Richard W. Roberts has put the Bush administration in a difficult position - trying to show sympathy for POW's seeking compensation for alleged torture while seeking to ensure that every resource possible is available to pay the rising costs of rebuilding Iraq.

Roberts awarded the POW's &653 million in compensatory damages this month and ordered the government to set aside that amount from the $1.7 billion in frozen assets held in a bank account in New York.

The Justice Department asked Roberts to rescind that order, arguing that President Bush formally seized the money for United States after U.S. troops invaded Iraq in March.

"The president has looked at this pot of money - this $17 billion - and made a judgment that this would be best used toward the rebuilding of Iraq," Justice Department attorney Shannen Coffin said during arguments Tuesday.

Stephen Fennell, a lawyer for the former POW's, chastised the government for withholding the money from American military personnel who paid a harsh penalty for fighting for their country.

The ex-POW's brought their case under a law that allows such lawsuits by American victims of torture or other abuses by agents of countries on the State Department's list of nations that sponsor terrorism.