US President Donald Trump Saturday has signed a memorandum that bans some transgender people from US military service but rolls back the blanket ban he ordered last year.
The new directive adopts recommendations from Defence Secretary Jim Mattis that "transgender persons who require or have undergone gender transition" cannot serve.
But it gives the Pentagon and other agencies some discretion in the matter, reports BBC.
The earlier blanket ban was blocked by federal judges.
The new memorandum says that transgender individuals with a history of gender dysphoria are barred from military service "except under certain limited circumstances".
The Department of Defence (DoD) had submitted a report to the president which said allowing those with a history of gender dysphoria to serve entailed "substantial risks" and could, by exempting them from existing physical, mental and sex-based standards, "undermine readiness... and impose an unreasonable burden on the military".
It said the Obama administration's decision to allow transgender individuals to serve in the military was largely based on a 2016 study by the Rand think-tank, which "contained significant shortcomings".