BY JAY WEAVER AND LUISA YANEZ

A federal appeals court on Wednesday upheld the convictions of five Cuban men accused of spying on the U.S. government, but threw out three of their sentences by a Miami judge -- including two life prison terms.

The decision by a three-judge panel in Atlanta was considered a major victory for federal prosecutors against the so-called Cuban Five. The decade-old case was steeped in controversy because prosecutors argued the Wasp spy network was linked to the Cuban government's 1996 shoot-down of two Brothers to the Rescue planes over the Florida Straits.

In a 2-1 vote, the panel upheld the central conviction and life sentence of the one defendant implicated by the Miami federal jury in that murder conspiracy, Gerardo Hernández. He was held responsible for the deaths of three Cuban Americans and a Cuban exile who were killed on Feb. 24, 1996, when Cuban fighter jets shot down two of their planes over international waters.

''Hernandez argues that his conviction should be reversed because the government failed to prove he intended the murder to occur within the jurisdiction of the United States, failed to prove that he knew of the object of the conspiracy, and failed to prove that he acted with malice aforethought,'' wrote appellate judge William H. Pryor Jr. in the 99-page ruling.

``Each of these arguments fails.''

Maggie Khuly, whose brother Armando Alejandre Jr. was among the four Brothers to the Rescue fliers shot-down, was relieved Wednesday.

`VICTORY FOR JUSTICE'

''We are very pleased the appeals court upheld the conviction of all the spies. It was truly a victory for justice,'' said Khuly, who attended almost every day of the six-month trial in 2001. ``The court confirmed what we knew all along -- that these men had received a fair trial.''

Khuly said she was mainly relieved Hernández's conviction -- linked to his involvement with the shoot-down -- was upheld.

''He's the one we're most concerned with because of the role he played in my brother's death,'' she said. ``We're very happy there will be no change to his sentence.''

On the Cuban Five's website, Hernández declared: ``Ours may be one of the most ridiculous accusations of espionage in the history of this country.''

The ruling by the 11th U.S. Circuit Court of Appeals does not mean the case of the Cuban Five is over.

In addition to the key ruling on Hernández, the appellate panel upheld the conviction and sentence of Rene González, who is serving a 15-year prison sentence for acting as an unregistered foreign agent for the Cuban government.

REDO SENTENCES

But the panel ordered U.S. District Judge Joan Lenard to redo her sentences for three of the convicted defendants: Ramón Labañino and Antonio Guerrero, who received life sentences for espionage conspiracy, along with Fernando González, who got 19 years for acting as an unregistered foreign agent.

Lenard, criticized by the appellate panel for handing down excessive sentences, could still send them to prison for a long time. No date has been set for the resentencings.

The panel found there were unproven claims that Labañino, Guerrero and Fernando González were leaders of the spy network, collected or transmitted top secret information or took part in a drug-trafficking operation.

MISTAKES MADE

In the case of Fernando González, the panel said Lenard wrongly ''enhanced'' his sentence based on a finding by prosecutors that he was ``a manager or supervisor.''

The appellate judges agreed with González, saying: ``Enhancement cannot be based solely on a finding that a defendant managed assests for a conspiracy.''

In the case of Labañino, the panel said Lenard made three mistakes when sentencing him -- including declining to go ''downward based on his minor role'' in the conspiracy.

The panel said the judge erred by finding that his objective in the conspiracy was to obtain top secret information.

But the panel did reject several of his other claims, including that the president of the United States should have been allowed to say if his action had truly endangered national security.

In Guerrero's case, the panel found that he deserved a new sentence because there was no evidence that top secret information was ``gathered and transmitted.''

Hernández made the same argument, to no avail. The panel ruled that judicial error was irrelevant because he was sentenced to life imprisonment on his murder-conspiracy conviction.

Hernández's lawyer, Paul McKenna, did not return calls for comment.

A former federal prosecutor in the Cuban Five case, David Buckner, called the appellate decision a ``huge win for the United States.''

Buckner also said there were several ''significant holdings'' in the ruling that could benefit the government in future murder conspiracy, espionage or terrorism cases.

Back in Cuba, the convicted spies are national heroes and martyrs, frequently featured in the island's government newspaper Granma.

SUPPORTERS INCENSED

In the United States, the San Francisco-based National Committee to Free the Cuba Five, which has called for their release, issued an angry response to the court's upholding of the convictions.

''This is a total outrage,'' said the committee's coordinator, Gloria La Riva. ``That a terrorist like Luis Posada Carriles, who is being protected by the Bush administration, is allowed to walk the streets of Miami and these men kept in jails is incomprehensible.

``They should be freed immediately. They should have never been arrested. They were working to protect the Cuban and American people from terrorist attacks.''

She called the vacating of the sentences for three of the men ``a step forward, but not enough.''

La Riva said the group will hold press conference Thursday in Miami and rallies across the world on Friday.

The five are currently serving their time in federal prisons in Florida, California, Colorado, Kentucky and Indiana.