SAN FRANCISCO - Construction of a mountaintop telescope in southeastern Arizona was approved Monday by a federal appeals court, which said its previous order halting construction was undone by Congress.

The University of Arizona project on Mount Graham has been fought by environmental groups, which contend it would extinguish an endangered subspecies of squirrel.

Congress sought to clear the way for the telescope with a 1988 law declaring no further environmental studies were needed. But after the U.S. Forest Service changed the proposed site, U.S. District Judge Alfredo Marquez and the 9th U.S. Circuit Court of Appeals ruled in 1994 that environmental review was required by law to prevent harm to the squirrel.

Congress then intervened again, at the request of project sponsors, and passed a law this April saying the new site was part of the area covered by the 1988 law waiving further environmental review.

Marquez ruled last month that the project could proceed and was upheld Monday in a 3-0 ruling of the appeals court, which had previously blocked the effect of the judge's order to allow time for an appeal.

While Congress has no power to overturn a federal court ruling, the recent amendment merely changed the previous law to specify that the telescope could be built, an act that was in Congress' power, the court said.