The U.S. Senate and House of Representatives are expected to pass a bill Thursday authorizing $400 billion for defense spending.
The Senate version of the bill would allow the lifting of a decade-old ban on research and development of so-called "low yield" nuclear weapons.
Such weapons, of five kilotons or less, would have about a third of the force of the bomb dropped on Hiroshima, Japan in World War II, which killed more than 100,000 people.
The Republican majority in the Senate turned aside attempts by Democrats to keep the ban on research and development.
Senator Wayne Allard, a Colorado Republican, said a modern military needs to have the broadest possible range of weapons at its disposal.
"We need to have some flexibility. Times are changing, our targets are changing," senator Allard said. "We need to have new technology. We need to study, and that's what this provides for."
But Democrats, including Senator Byron Dorgan of North Dakota, said lifting the ban could spur an arms race and increase the risk of nuclear war.
"That is the way to defend this country by stopping the spread of nuclear weapons, not to build more," senator Dorgan said.
The House version of the bill would lift the moratorium on research of low yield nuclear weapons, but keep the ban on their development.
In other Senate action Wednesday, lawmakers voted to approve continuing research on a high yield earth-penetrating nuclear weapon that Defense Secretary Donald Rumsfeld believes could deter countries from concealing weapons programs underground.
"It is important to appreciate that to the extent the United States is prohibited from studying the use of such weapons for example, for a deep earth penetrator - the effect in the world is that it tells the world that they are wise to invest in going underground," noted Mr. Rumsfeld. " And that is not a good thing, from our standpoint."
But Senator Carl Levin of Michigan, ranking Democrat on the Armed Services Committee, said these so-called bunker busters could be up to 70 times more powerful as the Hiroshima bomb, and their use should be unthinkable.
"These are not bunker busters, these are world peace destroyers, these are city destroyers, these are nation destroyers," senator Levin said.
Differences in the House and Senate versions of the legislation will have to be reconciled before a final bill is sent to President Bush for his signature.