A federal jury did not convict leaders of a Muslim charity on any of the 197 counts of supporting terrorists, and a judge yesterday declared a mistrial on almost all of the charges in what has been widely viewed as the government’s flagship terror-financing case.

The case, involving the Holy Land Foundation for Relief and Development and five of its backers, is the government’s largest and most complex legal effort to shut down what it contends is American financing for terrorist organizations in the Middle East. President Bush announced he was freezing the charity’s assets in December 2001, saying that the radical Islamic group Hamas had “obtained much of the money it pays for murder abroad right here in the United States.”

But at the trial, the government did not accuse the foundation, which was based in a Dallas suburb, of paying directly for suicide bombings. Instead, the prosecution said, the foundation supported terrorism by sending more than $12 million to charitable groups, known as zakat committees, which build hospitals and feed the poor.

The prosecution said the committees were controlled by Hamas and contributed to terrorism by helping Hamas spread its ideology and recruit supporters. The government relied on Israeli intelligence agents, using pseudonyms, to testify in support of this theory.

But prosecutors appeared to have made little headway in convincing the jury.

The case involved 197 counts, including providing material support to a foreign terrorist organization. It also involved years of investigation and preparation, almost two months of testimony and more than 1,000 exhibits, including documents, wiretaps, transcripts and videotapes dug up in a backyard in Virginia.

After 19 days of deliberations, the jury acquitted one of the five individual defendants on all but one charge, on which it deadlocked. A majority of the jurors also appeared ready to acquit two other defendants of most charges, and could not reach a verdict on charges against the two principal organizers and the foundation itself, which had been the largest Muslim charity in the United States until the government froze its assets in late 2001.

James T. Jacks, the first assistant U.S. attorney, said in court that the government would retry the case. Both prosecutors and defense lawyers have been barred from discussing the case in the press, and Chief Judge A. Joe Fish said that order continued in force.

The decision is “a stunning setback for the government, there’s no other way of looking at it,” said Matthew Orwig, a partner at Sonnenschein Nath & Rosenthal here who was, until recently, U.S. attorney for the Eastern District of Texas.

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