Cuban prosecutors will seek a 20-year prison sentence for Jewish U.S. aid contractor Alan Gross, accused of crimes against the state, Communist Party newspaper Granma said on Friday, in a case that has stalled progress in U.S.-Cuba relations.

A government statement posted on the paper's website said Gross was accused of "Acts Against the Independence and Territorial Integrity of the State" and that a trial date for him would be set soon.

Gross, 61, has been detained since he was arrested at his Havana hotel in December 2009.

Cuban authorities have accused him in the past of illegally importing satellite communications equipment and possibly spying.

The government statement gave no details about the charge, but the Cuban law it referred to said that someone "who in the interest of a foreign state" commits an act detrimental to the independence of the Cuban state or its "territorial integrity" faces a jail sentence of 10 to 20 years or the death penalty.

The United States has said Gross was only providing satellite communications equipment and Internet access for Jewish groups in Cuba and was not a spy.

The Obama administration said in a statement that "instead of releasing Mr. Gross so he can come home to his wife and family, today's decision by Cuban authorities compounds the injustice suffered by a man helping to increase the free flow of information, to, from, and among the Cuban people."

Representative Ileana Ros-Lehtinen, the Florida Republican who chairs the U.S. House Foreign Affairs Committee, said the news was "yet another wakeup call that the United States cannot negotiate with ruthless dictators."

Gross was working in a U.S. program begun by the Bush administration aimed at promoting political change in Cuba, which the Cuban government views as part of a long-standing U.S. attempt to topple the communist-led island's leaders.

Gross' attorney, Peter Kahn, in Washington said it was a "positive development" the case was moving forward, but the charges were the product of U.S.-Cuba hostility that dates to Cuba's 1959 revolution.

They "demonstrate once again that Alan is caught in the middle of a long-standing political dispute between the United States and Cuba," he said in a statement.

"Each time Alan traveled to Havana he declared everything that was required by Cuban customs authorities. Never did the Cuban authorities raise concerns about what he brought with him," Kahn said.

"Neither his presence nor actions in Cuba were ever meant to, or in fact did, pose any threat to the Cuban government," he said, calling on the two governments to resolve the case through diplomatic channels.

HURDLE TO CLOSER TIES

The United States has previously demanded his release and said there would be no major initiatives in U.S.-Cuba relations until he was free.

His detention has become a serious obstacle between the two nations, stalling steps by the governments of U.S. President Barack Obama and Cuban President Raul Castro to improve ties.

Ros-Lehtinen repeated criticism of Obama administration moves last month that further relaxed restrictions on U.S. travel and remittances to Cuba.

"This Administration's insistence on continually reaching out to the Cuban tyranny and seeking to ease restrictions is rewarding the despotic Castro brothers while at the same time undermining U.S. interests and security," she said in her statement.

Friday's announcement followed some recent positive signals the Gross case may be coming to some kind of resolution.

Last month, a senior U.S. State Department official expressed cautious optimism that Gross would be tried and freed once formal charges had been pressed.

A Western diplomat in Havana said at the time the trial would likely take place in a few weeks and that Gross was expected to plead guilty, then be sent back to the United States.

It was possible, said Cuba expert Arturo Lopez Levy of the University of Denver, that the charges would set the stage for a "humanitarian gesture" by Cuba.

Gross' wife, Judy, visited her husband last summer and told Reuters in October she had written a letter to Raul Castro expressing the couple's remorse for his work in Cuba.

She has pleaded with Cuba to release Gross because their daughter is being treated for breast cancer, but there has been no public reply by the government.

Gross, who is being held in a cell at a military hospital, is said to have lost 90 pounds (41 kg) in jail and suffers from health problems.