A US federal appeals court has upheld the use of the words "under God" in the Pledge of Allegiance and "In God We Trust" on US currency, rejecting arguments that the phrases violate the separation of church and state.

The San Francisco-based Ninth US Circuit Court of Appeals panel rejected two legal challenges by Sacramento atheist Michael Newdow, who said the references to God are unconstitutional and infringe on his religious beliefs.

The same appeals court caused a national uproar and prompted accusations of liberal judicial activism when it decided in Mr Newdow's favour in 2002, ruling that the pledge violated the First Amendment prohibition against government endorsement of religion.

The First Amendment guarantees that government will not "establish" religion, wording that has come to mean a general ban on overt government sponsorship of religion in public schools and elsewhere.

President George W. Bush called the 2002 decision "ridiculous," senators passed a resolution condemning the ruling and Mr Newdow received death threats.

Judge Carlos Bea, who was appointed by Mr Bush in 2003, wrote for the majority in Thursday's 2-1 ruling.

"The Pledge of Allegiance serves to unite our vast nation through the proud recitation of some of the ideals upon which our Republic was founded," he said.

Mr Bea noted that schools do not require students to recite the pledge, which was amended to include the words "under God" by a 1954 federal law. Members of Congress at the time said they wanted to set the United States apart from "godless communists".

Judge Stephen Reinhardt, who was part of the three-judge panel that ruled in Mr Newdow's favour eight years ago, wrote a 123-page dissent to the 60-page majority opinion. He wrote: "Under no sound legal analysis adhering to binding Supreme Court precedent could this court uphold state-directed, teacher-led, daily recitation of the 'under God' version of the Pledge of Allegiance by children in public schools."

Mr Newdow, a doctor and attorney, said he would ask the appeals court to rehear the case. If it rejects that request, Mr Newdow said he'll appeal to the US Supreme Court.