The U.S. Senate has narrowly rejected a measure to allow oil exploration in the Alaskan wildlife refuge - effectively tying up the nearly $450 billion defense budget.
Republicans had hoped to win passage by making the oil drilling issue part of a popular defense spending bill that has money for troops in Iraq and relief for victims of Hurricane Katrina - the storm that hit the U.S. earlier this year.
Democrats accused Republican Senator Ted Stevens of the U.S. state of Alaska of holding the defense bill hostage to push through a measure allowing oil drilling in the Alaska wildlife refuge.
In a statement, Senate Democratic minority leader Harry Reid said the Senate could move quickly to pass the defense bill once the controversial Alaska drilling measure had been resolved.
White House spokesman Scott McClellan said President Bush continues to support oil drilling in the Alaska wilderness.