By Jeremy Pelofsky

WASHINGTON (Reuters) - U.S. Attorney General Eric Holder on Thursday defended using both criminal and military courts to prosecute terrorism suspects amid a fierce fight over where to try the five alleged plotters of the September 11, 2001 attacks.

The Obama administration, and especially Holder, have come under withering criticism from liberals and conservatives alike about the venue and legal rights for terrorism suspects, delaying long-awaited trials against the September 11 suspects.

Republicans have decried Holder's plan to try the alleged September 11 mastermind Khalid Sheikh Mohammed and four others in a criminal court because they would be given full U.S. legal rights. They have demanded the five be tried in a military court, something the White House has been forced to consider.

But liberals, who have backed President Barack Obama, have slammed the military tribunals, arguing that the limited rights provided defendants there unfairly stack the deck against them and violate Obama's campaign pledge to restore the rule of law to such cases.

Holder refused to commit, saying both military and civilian courts were valid.

"This administration rejects the false choice critics would have us make, because if we were to exclusively follow only one path while blocking the use of the other, we would undoubtedly fail in our fundamental duty to bring every terrorist to justice," Holder told a civil liberties group.

After intense criticism and local opposition to Holder's plan to try the September 11 suspects in downtown New York City, the White House has been forced to reconsider his plan. Holder said the city was still a possibility, as was elsewhere in New York state.

CRIMINAL COURTS DEFENDED

Republicans in Congress have been joined by a few of Obama's fellow Democrats in trying to block funding for criminal trials for the September 11 suspects, which would force the administration to prosecute them in a military venue.

But in recent days Holder has stepped up his efforts to defend using criminal courts for terrorism suspects and on Thursday criticized the escalating rhetoric as seemingly "calculated to scare people rather than to educate them."

Holder said that avoiding sending terrorism suspects to criminal courts, which include the ability to plea bargain with defendants, would "hinder our ability to secure actionable intelligence and to enlist international cooperation, in our fight against terrorism."

He also noted that American citizens could not be tried by military tribunals, which would be problematic if they capture a suspect like the anti-American cleric Anwar al-Awlaki, who is wanted in connection with alleged terrorism plots. He was born in New Mexico and is believed to be hiding in Yemen.

At the same time, the attorney general said that military commissions "are not only appropriate, but also necessary to convict and neutralize terrorists," he told the U.S. Constitution Project.

He said they have been improved and they reflect the realities of conducting investigations in a war zone.

Six terrorism suspects held at the U.S. military prison at Guantanamo Bay, Cuba have been referred to military trials and Holder said he plans to refer more cases there.

(Editing by Cynthia Osterman)