A federal appeals court reinstated key elements of the District's plan to rein in the fast-growing George Washington University campus yesterday with a ruling that could force the college to either move hundreds of students out of Foggy Bottom or forgo any new construction projects.

The three-judge panel of the U.S. Court of Appeals for the D.C. Circuit upheld the city's right to regulate the growth of campuses, while rejecting the university's argument that the zoning dictates would infringe upon its academic freedom.

Lawyers for the city said that the ruling will compel GWU to house more than 70 percent of full-time undergraduates either within campus boundaries or outside Foggy Bottom, whose residents have long complained that the ambitious university and its students are changing the character of their historic neighborhood.

The latest ruling in a two-year legal battle also reinstates a provision of the District's campus plan for GWU requiring that all freshmen and sophomores live on campus. That requirement had been overturned by a federal judge last spring.

"It's a complete victory for the Board of Zoning Adjustment and the District," said Peter Lavallee, spokesman for the city's Office of the Corporation Counsel. "It completely reinstates their campus plan order."

University officials expressed disappointment with the ruling but offered little other comment, saying they were still analyzing it. They noted that they are fighting the District's campus plan in local court, meaning that GWU's zoning status could remain in legal limbo for some time.

The case is being closely watched by higher education leaders in the District and across the nation. "It's emblematic of town-gown conflicts throughout the country," said Sheldon E. Steinbach, vice president of the American Council of Education, which filed a brief in support of GWU.

Still, he said, since many of the facts in dispute were unique to GWU's campus, "the likelihood it would have any dramatic effect nationwide is remote."

GWU, now the city's largest university, has attracted complaints for years from neighbors about student misbehavior and a pattern of expansion -- constructing several buildings in Foggy Bottom, buying others and increasing enrollment. Early in 2001, the Board of Zoning Adjustment ordered a freeze on the school's undergraduate enrollment and a ban on all non-dormitory construction until GWU housed 70 percent of its roughly 8,000 undergraduates on campus. At the time, about half lived on campus.

Under a court order, the zoning board dropped the enrollment cap and instead required that GWU provide 5,600 beds on campus or outside Foggy Bottom -- plus one bed for every undergraduate beyond the 8,000-student level.

GWU officials objected that the mandate was unreasonable: It already had 4,120 beds on campus, plus 1,400 in residence halls just blocks from the official boundaries of campus, but under the Board of Zoning Adjustment's rules, those off-campus beds would not count toward the requirement.

A federal judge agreed last spring, noting that the city's requirement would have forced the university to buy or rent 1,500 units of housing outside Foggy Bottom on short notice, while leaving the off-campus residence halls vacant.

But the three-judge appellate panel disagreed in the ruling announced yesterday. Nothing, wrote Judge Stephen F. Williams, "forces the university to give up its Foggy Bottom dorms or prevents it from continuing to house students there. If it chooses, it can continue supplying that housing in addition to the 5,600 beds required" by the campus plan.

Though the ruling would allow GWU to house some of its off-campus students in neighborhoods outside Foggy Bottom -- such as Arlington, or other parts of the District -- by 2006 the 70 percent of students must be housed solely on campus. The university is building a dormitory that would house more than 700 students by fall 2004.

The campus plan would prohibit GWU from getting city approval for any nonresidential construction until it reaches compliance with the 70 percent housing ruling. Among the major projects that could be stalled are a new business school on 21st Street NW, for which the university hosted a ceremonial groundbreaking, and any new construction on the site of the university's old hospital.

Lavallee said the decision could also affect the university's zoning request to expand hours and services at its campus fitness center.

Ron Cocome, president of the Foggy Bottom Association, said he could not comment on the specifics of the ruling until he finished reading it. Still, he said he was hopeful it would establish stricter boundaries for a campus he believes has been allowed to seep into the surrounding neighborhood.

"What's important for us is to define a campus area in which [students] can live, and a residential community where we can live," he said.