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Chief Justice William Rehnquist lifted a stay Thursday in the case of Oliver North, clearing the way for trial to begin as early as Friday.

The action came a day after lawyers in the case reached agreement over the use of classified information, a development that prompted the government to drop its appeal holding up the case.The former White House aide's trial on 12 felony counts in the Iran-Contra scandal could begin this week, although U.S. District Judge Gerhard Gesell may wait until the end of the upcoming three-day holiday weekend before swearing in the jury.

Until Wednesday, Attorney General Dick Thornburgh had insisted that the administration have a representative in the courtroom to raise objections over the release of state secrets, a demand that was largely rejected by Gesell.

But Thornburgh compromised on Wednesday by allowing independent prosecutor Lawrence Walsh to act in his behalf if it becomes necessary during the trial to prevent disclosure of certain national security information.

Thornburgh said he did not believe the independent prosecutor's office surrendered any of its independence in doing so.

"I am pleased that a mechanism has been developed that will permit the trial to go forward, while ensuring that I can fulfill the responsibility imposed upon me by Congress to protect the national security interests of the United States," Thorn-burgh said in a statement.

At Thornburgh's direction Wednesday, Acting Solicitor General William Bryson delivered to the Supreme Court a motion to dissolve the stay on the trial. A temporary stay had been imposed Sunday by Rehnquist until the full court could consider the appeal at its regular Friday conference.

Justice Department spokesmen said the administration filed a similar petition with the U.S. Circuit Court of Appeals for the District of Columbia early Thursday. The jurors, who were selected last week, have been told to call the courthouse each afternoon to learn whether they had to report the next day.

The agreement appeared to end a weeklong legal drama in which Thornburgh had warned that, if the Justice Department were not allowed to participate directly in the case, he could be compelled to force dismissal of the charges stemming from North's role in secretly arming the Nicaraguan Contra rebels.

Prosecution of the case has been particularly complicated because it is the first to be tried by an independent prosecutor under a 1980 law allowing extraordinary measures to protect classified information during criminal trials.

Under the latest agreement, Walsh pledged that if clashes arise over classified information that he would argue it is irrelevant to the case, propose substitutions, or offer Thornburgh the option of submitting a court affidavit banning its use. In the latter case, Gesell likely would be forced to dismiss some or all of the criminal charges because North would unconstitutionally be prevented from using relevant information to defend himself.

What remained unclear, however, was whether the new agreement also would result in the kinds of frequent disruptions to the trial that Gesell said he would not tolerate.