By REUTERS

ALBANY, N.Y. (Reuters) - Two Islamic men accused of supporting terrorism after an FBI sting operation were ordered released from jail on Tuesday by a judge who blasted the government's case by saying there is no evidence they have any links to terrorists.

U.S. Magistrate David Homer ruled Yassin Aref and Mohammed Hossain should be released on $250,000 bonds and held in home detention under electronic surveillance while they await trial. He said that could take up to two years so the men will be allowed to work and attend mosque until the trial.

The pair had been ordered held without bail earlier this month -- a ruling largely based on an address book that prosecutors said was found in an Iraqi terrorist training camp. The book referred to Aref as ``the commander'' in Arabic.

The government now says that translation was an error and the word is "brother'' in Kurdish.

The order to release the two comes amid criticism that the Bush administration's anti-terrorism policies have caused authorities to leap to unfounded conclusions in cases that have fizzled or been dropped altogether after initial high-profile announcements.

Muslims in Albany -- home to about 7,000 followers of Islam -- have called the arrest of the two men a tragic misunderstanding and many have avoided attending mosques out of fear of being labeled terrorists.

Aref, 34, the leader of an Albany mosque, and Hossain, 49, a pizzeria owner, were arrested in a sting operation in which authorities said they agreed to help an FBI informant launder $50,000 from the sale of a shoulder-fired missile as part of a fake plan to assassinate a Pakistani diplomat.

They pleaded not guilty to charges of money laundering, supporting terrorism and conspiracy on Aug. 10.

NO TERRORIST LINK

The judge chided the government, saying the case is much weaker now than it first appeared. He said the two were not plotting violence and are not a danger to the community.

"The evidence in this case appears less strong today,'' Homer said. ``There is no evidence ... to support the claim that Mr. Aref has any contact with any terrorist organization.''

"There still is no evidence of Mr. Hossain's involvement with any terrorist organization,'' he said.

The judge said the case could take one to two years to come to trial as much of the evidence has to be translated from foreign languages.

Defense attorney Terence Kindlon said the government was not merely overzealous but had presented false information.

"We've gone from something that sounded sinister and ominous and scary and terrible to zero in less than two weeks,'' he told the judge. ``Our government doesn't need to go after a pizza man and an Iman who are perfectly innocent.''

He added: ``All we have here is basically the wreckage of the first hearing at which the government presented a lot of information that turned out to be bogus.''

Members of Aref's and Hossain's families were tearful during the hearing, but they were greatly relieved by the ruling, said Faisal Ahmad, a teacher at Aref's mosque.

"I think they are very thankful to God,'' he said. ``We just have to be patient. It's a test. Everything is a test.''

Prosecutors argued that whether the word was "commander'' or ``brother'' was irrelevant and does not affect the criminal charges the two men face. They say the pair were willing participants in the sting operation set up by the FBI.

Defense attorneys argued that Hossain thought the money was a loan, that Aref was brought in to unofficially witness the deal and that both men were victims of entrapment.

Under terms of their release, which is likely in one to two days, neither men may leave the area without permission. While both men have surrendered their passports, Hossain's five children would surrender theirs as well.