Updated

Alleged Al Qaeda sleeper agent Ali al-Marri won't be released on bond and will remain behind bars because he still poses a threat to the United States, a federal judge ruled Wednesday.

Al-Marri could still be moved out of military custody in South Carolina sooner than expected to face federal terror charges in Illinois. He is due in court in Peoria on Monday.

Al-Marri is charged with one count of providing material support to Al Qaeda and one count of conspiracy, according to the indictment filed in U.S. District Court in central Illinois.

The decision caps a morning of back-and-forth over whether the man dubbed an "enemy combatant" by former President George W. Bush would even have his bond hearing as scheduled.

Al-Marri lawyer's Andy Savage argued his client could stay at a secure location until his trial in Illinois. Savage's wife offered to put up whatever collateral was needed.

Prosecutor Michael Mullaney argued during Wednesday's hearing that al-Marri shouldn't be released on bail before the criminal case continues against him in Illinois.

Federal prosecutors said the Qatar native is still dangerous.

U.S. Magistrate Judge Robert Carr sided with the government, ruling that al-Marri will stay behind bars.

Savage told Carr that he believes U.S. Marshals might have audio of a conversation he had with his client and that tape could compromise their attorney-client talks, according to WCIV-TV.

Savage argued that he knew he was being videotaped, but was under the impression that the audio portion of the meeting in question with al-Marri was privileged, the station reported. The videotapes are in the government's possession and prosecutors said they are checking on whether there is audio with them.

Earlier in the day, two sources told FOX News the detention hearing might not go forward because the defense was considering waiving it.

Al-Marri was allegedly the only "enemy combatant" of the United States to be held in this country before being charged by the Justice Department a few weeks ago.

The alleged Al Qaeda sleeper agent has been detained at a South Carolina Navy facility since 2003, when President Bush declared him an "enemy combatant."

But on Feb. 26, in a major shift from the previous administration, the new Justice Department brought terror charges against al-Marri in a federal civilian court in Peoria, Ill.

President Obama ordered al-Marri surrendered to civil authorities after he was indicted in Peoria on federal charges of providing material support to terror and conspiracy.

Al-Marri made an initial appearance in court last week.

To get him released before trial, defense attorney Savage would have had to convince Carr that his client is neither a danger to the community nor a flight risk.

Click here for more on this story from WCIV.com.

FOXNews.com's Catherine Donaldson-Evans and The Associated Press contributed to this report.