The decision -- the latest in a series of stinging judicial defeats for the Republican billionaire, who took office in January -- means the case is likely to end up in the Supreme Court.
At issue was the intent behind the measure -- whether or not it deliberately singled out Muslims by targeting nationals from Iran, Libya, Somalia, Sudan, Syria and Yemen. Religious discrimination is forbidden by the US Constitution.
The Fourth Circuit Court of Appeals said it "remained unconvinced" that the part of the measure naming the specific countries had "more to do with national security than it does with effectuating the president's promised Muslim ban."
The court -- based in Richmond, Virginia -- further said it could not find that the government's security concerns outweighed the plaintiffs' concerns about discrimination.
"Congress granted the president broad power to deny entry to aliens, but that power is not absolute," Chief Judge Roger Gregory said in the 10-3 ruling.
"It cannot go unchecked when, as here, the president wields it through an executive edict that stands to cause irreparable harm to individuals across this nation."
Gregory said the order "speaks with vague words of national security, but in context drips with religious intolerance, animus, and discrimination."--AFP