A Wyoming jury today convicted Aaron James McKinney of felony murder in last year's beating death of gay University of Wyoming student Matthew Shepard, but acquitted him of a more serious charge of premeditated murder, a distinction that could indicate enough sympathy to spare him the death penalty.

The jury of seven men and five women also found McKinney guilty of kidnapping and aggravated robbery and will begin a penalty phase of the trial Thursday in which they will sentence him to death or life in prison.

McKinney, 22, a high school dropout who was working as a roofer at the time of the crime and who was described by his defense attorneys as a troubled young man addicted to methamphetamines, showed little emotion on hearing the verdict this morning. Standing with his hands folded in front of him, McKinney bit his lower lip and bowed his head.

Dennis and Judy Shepard, the parents of the murder victim, did not visibly respond and said through a spokesman they would not comment until the penalty phase is completed. Bill McKinney, the defendant's father, also declined to comment.

The Albany County jury, which deliberated for less than 10 hours, apparently took to heart an argument that McKinney's lead attorney hammered home during closing arguments Tuesday: that even though McKinney beat Shepard severely with a .357 magnum pistol, he did not plan to kill him. McKinney made that statement to police in a confession after his arrest.

McKinney and codefendant Russell Henderson posed as homosexuals to lure Shepard from a tavern popular with University of Wyoming students. Shepard, 21, was driven a mile outside of town, beaten in the head with a handgun and tied to a fence like a dead coyote. He was found by passersby, battered with burn marks on his body. He died three days later.

Prosecutors said McKinney was the mastermind of the attack. Henderson, who pleaded guilty last April and is serving a life sentence, said he didn't participate in the beating.

The murder last October gained nationwide publicity and spurred calls by gay and lesbian activists for enactment of tough anti-hate crime legislation nationally and in states such as Wyoming that have no such laws. It also galvanized gay advocacy groups in this region, with some organizations seeing huge jumps in membership in the months after Shepard's death.

David M. Smith, a spokesman for the Human Rights Campaign--the largest gay and lesbian activist organization in the nation--called the jury's decision today "a fair verdict, a just verdict." In finding McKinney guilty of felony murder, Smith said, the jury "repudiated the defense strategy of trying to put Matthew Shepard on trial" for being homosexual and instigating the attack by making a sexual advance on McKinney. "There's no doubt in our minds that this was a hate crime," Smith said. "This verdict sends a message that these crimes won't be tolerated."

Though District Court Judge Barton Voigt refused to allow defense attorneys to mount a "gay panic" defense, attorneys for McKinney managed in opening and closing arguments to contend that Shepard had made a pass at McKinney that prompted the beating.

As much as the gay activist community has rallied around the Shepard case, the trials of McKinney and Henderson have underscored a split between different organizations on the death penalty.

Bill Dobbs, a member of Queer Watch, a group that opposes capital punishment, said today, "This may end this chapter, but a very ugly chapter lies ahead." Dobbs called the failure of some advocacy groups to oppose the death penalty in this case "a failure on an important human rights issue and ultimately a failure to fight for gays and lesbians."

Though premeditated, first-degree murder and felony murder both carry a possible death sentence, there is an important distinction between them. In finding McKinney guilty of felony murder, the jury determined that he had intent to commit robbery and kidnapping, but not murder.

That, said Denver legal analyst Andrew Cohen, could prove decisive during the penalty phase. "To the extent they felt they didn't have premeditated first-degree murder might translate into sympathy or empathy during sentencing and that might translate into a life sentence," he said. "Maybe there's some shred of hope for him."

Wyoming juries generally have been reluctant to impose the death penalty; the last death sentence was carried out here in 1992. There are two people on death row.

CAPTION: Aaron McKinney could face death penalty for the fatal beating.