The committee agreed on a compromise offered by the Michigan Democratic Party that would give Clinton 69 delegates and Obama 59. Each delegate would get half a vote at the convention in Denver later this summer.

They also agreed to seat the Florida delegation based on the outcome of the January primary, with 105 pledged delegates for Clinton and 67 for Obama, but with each delegate getting half a vote as a penalty.

The panel easily reached a vote on the Florida settlement, but the Michigan situation proved stickier, passing 19-8. The vote caused audience members to shout out in objection, and at least a handful walked out of the hall after the vote.

Clinton supporters raised the specter of a continued fight over Michigan.

"Hijacking four delegates is not a good way to start down the path of party unity," said Harold Ickes, Clinton's chief delegate counter and a member of the panel. "Mrs. Clinton has instructed me to reserve her rights to take this to the credentials committee."

Earlier, Florida Rep. Robert Wexler, speaking for Obama, called on the DNC Rules and Bylaws Committee to seat the state's 211 delegates — but with only half their voting strength. That would give Clinton 19 more delegates than Obama from the state. Those are equal to the number that Clinton earned through victories in Ohio and Pennsylvania, Wexler said.

"Senator Obama should be commended for his willingness to offer this extraordinary concession," Wexler said to applause and hisses from the raucus crowd of supporters crowded into a meeting room of a Washington hotel to witness the meeting. "Senator Obama offers the concession in order to offer reconciliation with Florida voters."

Sen. Bill Nelson, a Clinton supporter speaking on behalf of the state party, also backed a plan to provide half the delegate votes but full voting power for the state's 26 party leaders and elected officials known as superdelegates.

Clinton's campaign remained steadfast in its push to seat the full delegation. "I want it all," said Arthenia Joyner, a state senator from the Tampa area who spoke on Clinton's behalf. She urged the panel to "give voices back to the 1.75 million voters in Florida" so Democrats can "leave the room today, hand-in-hand, joining together and focused on victory in November."

Resolving the Michigan dispute has proved thorny for the committee. Clinton was the only major candidate on the ballot in the state's Jan. 15 primary, and prevailed over "uncommitted."

Mark Brewer, the state party chairman, urged the panel to grant 69 of the state's 128 pledged delegates to Clinton and 59 to Obama.

Former Michigan congressman David Bonior, speaking for Obama, said the delegates should be split evenly, calling it the "only apprioriate and fair way" to resolve the dispute. Under that scenario, each candidate would get 64 delegates.

The Clinton campaign is pushing for a 73-55 split with Obama, in accordance the state's primary results.

"You've got to honor the 600,000 voters in Michigan," former Michigan Gov, James Blanchard, a Clinton supporter, told the panel. "If you turn your back on the voters of Michigan and Florida, you will be flirting with a McCain victory."

Blanchard said the primary was not flawed, but that other Democrats "had a flawed strategy" because "neither the DNC rules nor Michigan law … required them to take their names off the ballot."

Earlier, Democratic National Committee chairman Howard Dean told the panel that their "actions today will put us back on course for party unity."

He said Democrats had endured a "very tough, long difficult campaign, but it has made our candidates much stronger."

Outside of the hotel, a crowd waved homemade signs and chanted "Every vote!" Hotel security staff kept watch over the crowd, shepherding people off the hotel grounds at times.

By urging the committee to seat all the delegates from Michigan and Florida, Clinton is trying to strengthen her argument to uncommitted superdelegates that she holds the lead in the popular vote and is better positioned win the general election.

Obama, who leads in delegates and states won, is 42 delegates shy of the 2,026 delegates now needed to clinch the nomination. He also leads among superdelegates — the party insiders and elected officials who will determine the winner of the closest Democratic contest in two decades.

Beverly Battelle Weeks, 56, a Clinton delegate who got up well before dawn to drive up from Richmond, Va., carried a black umbrella on which she had pasted letters spelling out "Count All Votes."

"The right thing to do is to seat all the delegates. Anything less is not democratic," she said.

Tad Devine, a Democratic strategist who is neutral in the race, said he believed Obama's nomination was inevitable. The committee's decision will signal whether "we see the beginning of the party pulling behind the nominee or the continuation of a long primary battle that would go all the way to the convention," he said.

Michigan and Florida were stripped of their delegates — 368 in total — for holding their primaries early in violation of party rules. Clinton won both contests. Neither candidate campaigned in the states before their January contests. Obama also took his name off the Michigan ballot.

"We have suffered horribly," said Jon Ausman, a Democratic National Committee member from Florida. He recommended that the rules committee give all his state's superdelegates a full vote at the convention and grant one-half vote to the rest.

The most widely discussed compromise envisioned granting seats to all those delegates, but giving each one-half a vote. That would satisfy Clinton's call for all to be seated without jeopardizing Obama's lead.

Party leaders, such as Dean and House Speaker Nancy Pelosi, are eager to see a deal that brings a swift resolution to their party's marathon nomination fight. Democrats also want to heal wounds among voters in Florida and Michigan, both battleground states in the November general-election fight against Republican presumptive nominee John McCain.

Obama campaign manager David Plouffe earlier this week told reporters that their camp is "willing to seat some delegates...in the interest of bringing this to resolution."

But Harold Ickes, a member of the committee and Clinton's chief delegate counter, on Friday reiterated the campaign's call that all it wants to see all the delegates seated according the results of the January contests in each state.

The campaign also took issue with a legal analysis issued by DNC lawyers earlier this week that said party rules call for the two states to lose at least half of their delegate strength. A letter sent to the committee Friday by Clinton's general counsel Lyn Utrecht said the panel "can and should seat all the delegates" with "full votes."

Clinton's aides concede she still will trail Obama's delegate count even if she prevails today. However, the number needed to clinch the nomination is expected to go up, depending on how many delegates the committee seats. That means Obama will have to win over an increasing number of the roughly 200 remaining uncommitted superdelegates to lock up the nomination.

Ickes and other Clinton aides also have not said whether they would stage a credentials fight at the August convention if they leave Saturday's meeting with an unfavorable decision. "We think it's not useful to cross streams before we come to them," Ickes said.

The 30-member panel faces a full day as it weighs its options.

"I've been to a lot of rules committee meetings and I never thought I'd live to see them carried live on television," said Devine, who was a senior adviser to Democrat John Kerry in his 2004 White House bid.