A federal judge Wednesday ordered Usama bin Laden (search), Saddam Hussein and others to pay nearly $104 million to the families of two Sept. 11 victims, saying there is evidence -- though meager -- that Iraq had a hand in the terrorist attacks.

The closely watched case was the first lawsuit against the terrorists believed responsible for the World Trade Center attack to reach the damages phase.

U.S. District Judge Harold Baer (search) ordered that the damages be paid by bin Laden, Al Qaeda, the Taliban (search), Saddam and the former Iraqi government. The judge ruled against them by default in January after they failed to respond to the lawsuits brought on behalf of two of the trade center dead.

James E. Beasley, a Philadelphia lawyer who brought the case, hopes to collect the money from frozen Iraqi, bin Laden and Al Qaeda assets.

However, further court proceedings would be required before any payout could occur. And Beasley said it is unclear how much money could be available to satisfy the judgment. To help pay for Iraq's reconstruction, the Bush administration has started using roughly $1.7 billion Iraqi funds frozen in 1990.

Beasley called Baer's finding "a significant victory" because it represented the first time a judge linked Al Qaeda and Iraq in the Sept. 11 terrorist attacks.

In his ruling, Baer concluded that lawyers for the two victims "have shown, albeit barely ... that Iraq provided material support to bin Laden and Al Qaeda" and collaborated in or supported Al Qaeda's Sept. 11 attacks.

Baer said lawyers relied heavily on "classically hearsay" evidence, including reports that a Sept. 11 hijacker met an Iraqi consul to Prague, Secretary of State Colin Powell's remarks to the United Nations about connections between Iraq and terrorism, and defectors' descriptions of the use of an Iraq camp to train terrorists.

James Kreindler, a lawyer representing the families of 500 people killed and 1,000 injured in the attacks, said a case his firm was preparing for trial will offer proof of ties between Iraq and Al Qaeda.

"We have uncovered the financial connection between Iraq and Al Qaeda," he said.

Kreindler's case, which is still pending in federal court in New York, seeks damages from more than 200 defendants, including Iraq, Iran, Sudan, Al Qaeda, the Taliban, Saudi Arabia government officials, charities that fronted Al Qaeda and banks that laundered money.

Baer heard evidence for two days in March to help him determine damages.

The cases were brought on behalf of George Eric Smith, 38, an analyst for SunGard Asset Management, and Timothy Soulas, 35, a senior managing director and partner at Cantor Fitzgerald Securities.

The cases relied in part on a 1996 law that permitted lawsuits against countries identified by the State Department as sponsors of terrorism.