The court said Britain would not violate EU human rights rules by extraditing the suspects, who could face life sentences in a spartan maximum-security prison.
However, the European Court of Human Rights in Strasbourg, France, said the five "should not be extradited" until its judgment becomes final -- a move which could take months -- or until a possible appeals process ends.
The case centering on Mustafa Kamal Mustafa, also known as Abu Hamza al-Masri, who is considered Britain's most recognizable extremist, has been closely watched as a sign of Europe's view on tough U.S. prisons.
The court also put off ruling on the case of a sixth suspect, Haroon Rashid Aswat, as it awaits further information about that detainee's schizophrenia and conditions of his detention at a British hospital.
Based on charges filed in the U.S., the suspects could get lifelong jail terms without parole in maximum security conditions, such as with concrete furniture, timed showers, tiny cell windows and no outside communications.
The court's ruling centered on whether such conditions would violate Europe's human rights rules. The court agreed to consider the question in a ruling about four of the suspects in July 2010.
The various challenges against extradition rested on the suspects' likely detention in the ADX Florence "Supermax" prison in Colorado -- where they would be held in solitary confinement.
Al-Masri, 53, who is blind in one eye and wears a hook for a hand, is known for his fiery anti-Western and anti-Semitic outbursts. He claims he has lost his Egyptian nationality, but Britain considers him an Egyptian citizen. The court listed him as a British national.
In separate cases, Babar Ahmad is accused of running websites to raise money, appeal for fighters and provide equipment -- like gas masks and night vision goggles -- for terrorists. Syed Talha Ahsan has been charged with conspiring to support terrorists via the Internet.
Ahmad's brother-in-law, Farhad Ansari, said the family hoped to appeal to the European Court's grand chamber. He questioned the alleged "torture" and "inhuman and degrading treatment" in Supermax prisons.
"It is completely inhumane and no country can justify sending one of its citizens to such a scenario," he said.
Two other cases were also considered by the European court in the dossier.
Khalid al-Fawwaz, a Saudi citizen, and Adel Abdul Bary, who is Egyptian, are wanted over the 1998 bombings of two U.S. embassies in Kenya and Tanzania that killed 224 people. Al-Fawwaz, allegedly Osama bin Laden's representative in Britain, has been charged with more than 269 counts of counts of murder.
The family of Ahmad, who has spent eight years in prison in Britain awaiting extradition, called for him to be tried in Britain. He hasn't faced charges in Britain, but has been held without trial for the longest period of any British citizen detained since the Sept. 11, 2001, attacks.