Terry Jones, 59, was sent to the county jail in Detroit after he declined to meet the terms of a ruling by District Judge Mark Somers in an apparent protest.
Somers had ordered Jones and a supporter, Wayne Sapp, to each pay $1 under the terms of an order that would have also barred them from the Islamic Center of America mosque and nearby public property for three years.
A six-person jury heard over five hours of testimony and argument before concluding that the planned protest by Jones was "likely to breech the peace."
The case pitted questions of free speech against concerns about violence in Dearborn, Michigan, a suburb of Detroit with one of the largest Muslim American populations in the United States.
Jones, 59, is the leader of a tiny, fringe fundamentalist church in Gainesville, Florida, who has generated publicity and controversy by burning the Koran as part of what he describes as a campaign against "radical Islam."
Jones, who represented himself and wore a faded leather jacket and jeans, sat stone-faced and said little after the jury read out its verdict.
When Somers asked if he was prepared to meet the terms of the $1 bond, Jones said, "No."
Prosecutors, who had sought a $25,000 bond for both Sapp and Jones, said they could be jailed for up to three years if they declined to pay the $1 bond in protest.
"I strongly voice my disagreement with the ruling," said Sapp, 42, when asked by Somers if he had any comment on the ruling. "The peace bond is to prohibit free speech."
Sapp was also ordered to jail.
Jones had asked for a permit to protest outside the Islamic Center of America on Good Friday, a time when both the mosque and four nearby churches were expected to be crowded with worshipers.
Dearborn police had denied Jones's request and asked him to protest instead in a "free speech zone" in front of one of the city buildings.
But Jones, who represented himself in court on Friday, argued that violated his free speech rights.
"The First Amendment is only valid if it allows us to say what other people may not like," Jones told jurors. "Otherwise, we do not need the First Amendment."
The American Civil Liberties Union agreed, saying police had overstepped by trying to force Jones to post a "peace bond" that could hold him financially responsible for police protection.
The civil rights group filed a motion asking District Judge Mark Somers to dismiss the case.
Somers, who had ruled in favor of prosecutors before the trial, declined to do so.
"It is unconstitutional to put a price on free speech in anticipation that the speech may not be welcome by others," said Rana Elmir, a spokeswoman for the ACLU.
Police had estimated that it would cost over $46,000 -- including the cost of a helicopter and a dump truck -- to keep violence from breaking out if Jones were allowed to protest.
Last month, Jones staged and videotaped a mock "trial" for the Koran and burned a copy of the holy book in a gesture that prompted riots in Afghanistan and widespread condemnation.
Dearborn Police Chief Ronald Haddad had told jurors that as many as 10,000 counter-protesters could assemble if Jones were allowed to appear on city property across from the mosque, city an estimate from a local imam.
(Reporting by Bernie Woodall. Editing by Kevin Krolicki and Peter Bohan)
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