The House passed two separate defence bills, one for funding and one for defence policies that contained identical measures initially opposed by US President George W Bush requiring humane treatment of detainees in US custody.
But, in a concession to the White House, the bills curb the ability of inmates at the US prison at Guantanamo Bay, Cuba, to challenge their detention in federal court.
Congress is pushing to complete its work for the year and the policy bill could go to the Senate for final passage late on Tuesday before being sent to Mr Bush.
The Senate will take up the funding measure this week, with a fight expected over an unrelated measure added to the bill to allow oil drilling in an Alaska wildlife refuge.
Coercion
The bills also would let information gleaned by coercion to be used against Guantanamo inmates.
"What we do is leave that up to the court if it finds that there's coercion," said Senator Carl Levin, a Michigan Democrat who helped worked out a compromise with the White House.
The funding bill provides A$609.77 billion for defence, including A$67.26 billion for the wars until Congress acts on an emergency war supplemental early next year that lawmakers said could be between A$107.61 billion and A$134.52 billion.
The torture ban represents a congressional rebuke of Bush, who resisted the measure pushed by Arizona Republican Senator John McCain.
It was introduced in response to a scandal over the abuse of detainees by US soldiers at Abu Ghraib prison in Iraq, reports the
CIA has run secret prisons abroad, and harsh interrogations in Guantanamo, Afghanistan and elsewhere.
Human rights advocates were elated when Mr Bush accepted Senator McCain's amendment after opposing it for months on the grounds it would hamper intelligence-gathering in the US war on terrorism.
But rights advocates said the McCain amendment was partly undercut by the measure limiting Guantanamo inmates' access to courts and allowing use of information obtained by coercion.
McCain amendment
Senator McCain's amendment bars cruel, inhuman or degrading treatment of prisoners in US custody, and requires that interrogations adhere to standards set by the Army manual.
The White House had wanted more sweeping protections against prosecutions, and Vice President Dick Cheney had pressed to exclude the CIA from the measure.
In negotiations with the White House, Senator McCain only agreed to extend to CIA interrogators the military defence standard of whether a reasonable person would find they were following a lawful order.
Mr Cheney, in an interview with ABC News' Nightline program, said he backed legislation to ban inhumane treatment of prisoners, but criticised what he saw as a diminishing commitment by some to do "what's necessary" to defend the country.
"One of the things I'm concerned about is that as we get farther and farther away from 9/11, and there have been no further attacks against the United States, there seems to be less and less concern about doing what's necessary in order to defend the country," Mr Cheney said.
The defence policy bill also puts Congress on record saying that 2006 should be a time of "significant transition" toward full Iraqi sovereignty, with Iraqi forces taking the lead for security and creating conditions for a phased US withdrawal.
The Senate approved that resolution overwhelmingly in November in a move that added pressure on Mr Bush to present a plan to end the war.