The U.S. government acknowledged on Wednesday for the first time that the 2002 deportation of Maher Arar to a Syrian jail was not handled properly — an admission the Syrian-born Canadian called "an encouraging step."

'I am pleased that the U.S. administration has taken the encouraging step of acknowledging that my case was mishandled.'—Wrongly imprisoned Syrian-Canadian Maher Arar, in a written statement

"Our communication with the Canadian government on this [case] was by no means perfect; it was in fact quite imperfect," U.S. Secretary of State Condoleezza Rice said in Washington.

"We have told the Canadian government we do not think this was handled particularly well … and we will try to do better in the future," Rice said while testifying before the House of Representatives foreign affairs committee.

Later in the day, Arar responded in a statement to Rice's comments.

"I am pleased that the U.S. administration has taken the encouraging step of acknowledging that my case was mishandled," the statement read. "I fully support the very important work of the congressional committees which are trying to get to the bottom of the extraordinary-rendition program."

Arar, now 37, was interrogated and tortured after U.S. officials sent him to Syria five years ago as a terror suspect. He spent nearly a year in prison but his name was cleared by the Canadian government following an inquiry last year.

Asked by Bill Delahunt, the Democratic congressman for Massachusetts, why the U.S. rendered Arar to Syria over his objections, Rice admitted the case was mishandled.

She did not apologize for the treatment of Arar, as Republican and Democratic legislators did last week, but said the case could have been handled better.

'Aware of claims' of torture

"I am aware of the Canadian inquiry, of course. I am aware of the inquiry and as I said, we do not think this case was handled as it should have been," she said.

'What you're hearing today is tiny, itty-bitty mea culpas when they should be big fat admissions, apologies and compensations. '—Julian Falconer, lawyer for Maher Arar

Rice told Delahunt she was "aware of claims" that the engineer, who made his home in Ottawa, was tortured while imprisoned in Syria.

Pressed about whether the U.S. relied on Syria's assurances that he would not be tortured, Rice offered to provide a full accounting of the events of Arar's arrest at a another time because "my memory of some of the details has faded."

Arar's lawyer, Julian Falconer, observed: "Slowly but surely the U.S. government is conceding that mistakes were made."

But he told CBC News on Wednesday that what appears to be an American government "backsliding inch by inch" on previous false assertions isn't good enough.

"Why not do the right thing? Why not do what the Canadian government did and admit that they made huge mistakes … that resulted in an absolute horror for him?" Falconer said.

"What you're hearing today is tiny, itty-bitty mea culpas when they should be big fat admissions, apologies and compensations."

Remains on U.S. no-fly list

U.S. officials detained Arar during a September 2002 stopover in New York as he was returning home from a family vacation in Tunisia. He was later flown to Syria based on misleading intelligence provided by the RCMP to U.S. authorities, which suggested Arar had ties to al-Qaeda militants.

In January, Ottawa reached a $10-million settlement with Arar over Canada's role in the deportation. The House of Commons issued a unanimous apology after the September 2006 release of the Justice Dennis O'Connor's report that cleared his name.

Prime Minister Stephen Harper told the House of Commons on Wednesday the government was "encouraged" by Rice's comments.

"We have raised this issue on many occasions with the Americans and we hope that the U.S government will act to fully address this matter," Harper said.

In spite of the developments, the U.S. has continued to refuse to remove Arar's name from a list restricting him from flying to the U.S.

U.S. civil suit still pending

"We and the Canadians do not have the same understanding of what is possible in the future for Mr. Arar in terms of travel," Rice said on Wednesday.

Arar still has a lawsuit pending against American officials. His lawyer for the U.S. civil suit, Maria LaHood, told CBC News from Chicago on Wednesday that a three-judge panel would review whether the case should proceed on Nov. 9 in New York.

One of the U.S. government's arguments why the case should not be heard is because of national security and foreign relations reasons.

"I'm not sure what impact [Rice's comments] will have on this suit," LaHood told CBC News Wednesday.

"I'm hopeful that this first step in the right direction will lead to the administration actually letting the case proceed and eventually lead to an apology and a full acknowledgment of what they've done."