A court in military-ruled Burma rejected opposition leader Aung San Suu Kyi's latest bid for freedom Friday, turning down an appeal of her most recent sentence of house arrest, her lawyer said.

Suu Kyi was convicted and sentenced in August for briefly sheltering an uninvited American at her home earlier this year, in a verdict that drew international condemnation and ensured that she would not be able to participate in elections scheduled for next year.

She argued in the appeal that the conviction was unwarranted, but the Yangon Division court ruled against the appeal, lawyer Nyan Win said.

He said Suu Kyi's legal team would file a new appeal to the Supreme Court within 60 days, and that Friday's proceedings had opened a new possibility for the defense's legal arguments.

He said the court accepted the argument that the 1974 constitution under which she was charged was null and void. However, the court said the provisions of the 1975 security law under which Suu Kyi has been kept under house arrest remained in force.

"I think there is a window open over there. They have opened a window," Nyan Win said.

Already in detention for about 14 of the last 20 years, the Nobel Peace Prize winner was sentenced in August to another 18 months for sheltering the American, John Yettaw.

Yettaw has said he wanted to warn Suu Kyi he had a "vision" that she would be assassinated. He was sentenced to seven years in prison but released on humanitarian grounds and deported less than a week after the verdict.

Security was tight for Friday's ruling, with riot police ringing the court house.

In the appeal, Suu Kyi's lawyers raised no new substantive arguments that had not been heard in the original district court trial.

Burma's courts almost always follow the same hard line toward Suu Kyi and the country's democracy movement, which the military government often accuses of collaborating with the country's enemies to destroy the nation.

But Friday's ruling came amid a tentative change in the political winds, after the United States announced last week it was modifying its tough policy of seeking only to isolate the military regime and would instead try to engage it through high-level talks.

The U.S. said it will not give up its political and economic sanctions against the regime. It and other Western nations apply sanctions because of Burma's poor human rights record and its failure to turn over power to Suu Kyi's party after it won the last elections in 1990.

U.S. Assistant Secretary of State Kurt Campbell, the top U.S. diplomat for East Asia, told the Senate Foreign Relations Asia Subcommittee on Wednesday that lifting sanctions as the administration tries to start a dialogue, without Burma making any democratic changes, would be a mistake.

At the same time, Suu Kyi, 64, has made what appears to be a confidence-building gesture toward the junta, suggesting last week in a letter to leader Senior Gen. Than Shwe that she is willing to cooperate with it to have the sanctions lifted, according to a statement from her National League for Democracy party.

She had previously welcomed sanctions as a way to pressure the junta to achieve political reconciliation with the pro-democracy movement. The movement has insisted on concessions from the government if they are to work together, particularly the freeing of political prisoners and the reopening of party offices around the country.

Suu Kyi was convicted Aug. 11 and sentenced to three years in prison with hard labor after Yettaw secretly swam to her home. The sentence was commuted to 18 months of house arrest by Than Shwe.

Suu Kyi has described the conviction as unfair. Authorities would not let her attend the appeal hearing.