The US Senate has blocked a measure that would let gay men and women serve openly in the military.
60 votes were needed for debate to begin on the bill authorising defence programmes and repeal of the policy known as 'don't ask, don't tell'.
56 senators voted yes and 43 no, but the measure will probably have another chance this year.
Every Republican present yesterday voted to block debate on the bill, while Democrats Mark Pryor and Blanche Lincoln joined them.
Since 1993, gay people have been allowed to serve in the US military, as long as they hide their sexual orientation. They are expelled if it becomes known.
Polls have suggested that most US citizens support lifting the ban, and repealing it was one of President Barack Obama's promises in his 2008 campaign.
His Democrats in Congress wanted to scrap the policy before November's congressional elections in which Republicans are expected to make big gains, possibly making it more difficult to repeal the ban.
The House has already voted to change the law.
Advocates of the change are expected to try again in the Senate during the 'lame-duck' session of Congress that is expected to follow the elections.
The White House said it supported another attempt.
'We're disappointed at not being able to proceed on the legislation, but we'll keep trying,' White House spokesman Robert Gibbs said.
Independent Senator Joe Lieberman, co-sponsor of the repeal, said he believed it could still pass.
'We didn't win today, but we can win this fight this year,' he said.
Mr Lieberman said 14,000 soldiers had been kicked out of the military because of the policy since 1993.
That was 'the equivalent of an entire division of war fighters, that we need in places like Afghanistan and elsewhere around the world', he said.
