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MILAN/ROME (Reuters) - An Italian judge sentenced 23 Americans to up to eight years in prison on Wednesday for the abduction of a Muslim cleric, in a symbolic condemnation of the CIA "rendition" flights used by the former U.S. government.

The Americans were all tried in absentia because the United States refused to extradite them.

The U.S. State Department expressed its disappointment with the verdict, the first of its kind, but campaigners who have long complained that the renditions policy violated basic human rights said the ruling set an important precedent.

"This decision sends a clear message to all governments that even in the fight against terrorism you can't forsake the basic rights of our democracies," said prosecutor Armando Spataro.

Judge Oscar Magi handed down the convictions for the abduction of Egyptian-born cleric Hassan Mustafa Osama Nasr, snatched off a Milan street in 2003 and flown to Egypt for interrogation.

The heaviest sentence -- eight years in prison -- was handed down to the former head of the CIA's Milan station, Robert Seldon Lady, while 21 other former agents got five years each.

U.S. Air Force Lieutenant Colonel Joseph Romano was also sentenced to five years, despite a request from the Pentagon that the case should be tried by U.S. courts.

Magi dropped the case against three Americans, including a former CIA Rome station chief, because of diplomatic immunity.

Charges were also dropped against five Italians, including the former head of the Sismi military intelligence service, Nicolo Pollari, because evidence against them violated state secrecy rules.

However, the judge sentenced two more junior Sismi agents to three years in prison as accomplices, indicating Italian authorities were aware of the abduction.

"LIKE A SLAUGHTERED SHEEP"

The judge ruled that those convicted should pay 1 million euros in damages to Nasr, better known as Abu Omar, and 500,000 euros to his wife.

Abu Omar, under surveillance by Italian police at the time of his abduction on suspicion of recruiting militants for Iraq, was secretly flown from Aviano airbase in northeast Italy via Ramstein base in Germany to Egypt, where he says he was tortured and held until 2007 without charge.

"I was hung up like a slaughtered sheep and given electric shocks," Abu Omar has told Human Rights Watch.

It is the first case to contest the practice of "extraordinary rendition" under the administration of former U.S. President George W. Bush, in which terrorism suspects were captured in one country and taken for questioning in another, where interrogation techniques were tougher.

The trial, which began in 2007, tested U.S.-Italian relations. It moved slowly because successive Italian governments, including Prime Minister Silvio Berlusconi's conservative administration, refused to seek the extradition of the U.S. defendants.

"This is clearly a historic verdict," said Judith Sunderland of Human Rights Watch. "It is a real testament to the tenacity of the Milan prosecutors' office that this case went forward."

Washington, which has never acknowledged any rendition flights from Italy, is still debating the harsh interrogation of terrorism suspects in U.S. custody and whether to prosecute the officials responsible.

"The United States shouldn't need a foreign court to distinguish right from wrong," Amnesty International said.

"The Obama administration must repudiate the unlawful practice of extraordinary rendition -- and hold accountable those responsible for having put the system in place -- or his administration will end up as tarnished as his predecessor's."

Italy's Il Giornale newspaper, owned by Berlusconi's family, quoted Lady as saying in June: "Of course it was an illegal operation. But that's our job. We're at war against terrorism."