In effect, the administration wants to continue barring gays from the military even though it ultimately favors repealing the policy known as "don't ask, don't tell."
"They are in a very bizarre position, frankly, of their own making," CNN senior legal analyst Jeffrey Toobin said.
On Wednesday, the White House referred all questions about the issue to the Department of Justice.
The administration filed a motion Tuesday asking U.S. District Court Judge Virginia Phillips to stay her order last month that banned the enforcement of the "don't ask, don't tell" policy. When Phillips denied the request, government lawyers took their case to the 9th Circuit on Wednesday.
In court documents filed in San Francisco, California, the administration argued that "don't ask, don't tell" should remain intact for now.
Pentagon gives OK to gay recruits The administration argued that changing it abruptly "risks causing significant immediate harm to the military and its efforts to be prepared to implement an orderly repeal of the statute."
Toobin said the administration would like Congress to deal with the issue on a political level and doesn't want the courts to take it on unilaterally.
A measure that would repeal the policy after a military review and approval from the president, defense secretary and Joint Chiefs chairman has passed the House and awaits action in the Senate.
By battling the legal challenge to the existing law - a traditional practice of U.S. governments - the administration is trying to buy time to implement the repeal process worked out with military leaders and contained in the legislation before Congress.
If the 9th Circuit overturns Phillips' ruling and Congress does not take any action, "don't ask, don't tell" could be back.
"And the Obama administration would be responsible for that," Toobin said.
Meanwhile, spokeswoman Cynthia Smith said Wednesday that the Defense Department "will continue to obey the law, and we will abide by the terms of the court's injunction unless and until the injunction is stayed or vacated."
The Log Cabin Republicans, plaintiffs in the case that Phillips ruled on, said Wednesday that the group remained fully committed to defending this worldwide injunction because it is what is best for all service members.
"It respects their fundamental constitutional rights," said Christian Berle, deputy executive director of the group. "We'll continue to defend this ruling all the way to the United States Supreme Court if necessary."
The group was expecting the 9th Circuit to consider the request for a stay in the next five days. By the time there is a court ruling, "don't ask, don't tell" would have been suspended for almost two weeks.
The Pentagon has already begun advising recruiting commands that they can accept openly gay and lesbian recruit candidates, according to Smith.
The guidance from the personnel and readiness office was sent to recruiting commands Friday, Smith said.
The recruiters were told that if a candidate admits that he or she is openly gay and qualifies under normal recruiting guidelines, the application can be processed. Recruiters are not allowed to ask candidates if they are gay as part of the application process.
Berle said there have not been any incidents of consequence the administration feared would occur.
"The armed forces continues to move along and succeed because it is the greatest military in the world," Berle said.
Dan Choi, an infantry officer who was discharged under the "don't ask, don't tell" policy, turned in paperwork Wednesday to re-enlist in the Army. He said the Obama administration ought not to lift a finger to defend discrimination.
"They should walk their talk," Choi said after re-enlisting.
The Obama administration has said it needs more time to work with the Pentagon to repeal the policy, blasted by critics as blatantly discriminatory.
"This president has made a commitment, and it's not a question of whether that program, whether that policy will change, but when," Obama adviser David Axelrod said. "We're at the end of a process with the Pentagon to make that transition, and we're going to see it through."
The arrangement worked out with the Pentagon includes a military review of how to make the transition work, which is to be completed in December. After that, Obama, the defense secretary and the Joint Chiefs chairman would have to certify that the plan won't harm the combat readiness of U.S. troops.
Obama and White House Press Secretary Robert Gates have repeatedly stressed the need for an orderly transition from the "don't ask, don't tell" policy in order to deal with myriad issues including barracks arrangements and benefits.
Speaking to a mostly young audience at the MTV, BET, CMT town hall meeting last week, Obama reaffirmed that the "policy will end and it will end on my watch."
"I agree with the basic principle that anybody who wants to serve in our armed forces and make sacrifices on our behalf, on behalf of our national security, anybody should be able to serve," he said.
At the same time, Obama said, "it has to be done in a way that is orderly," and he insisted that congressional action is needed because Congress passed a law that prohibits the president from unilaterally changing the policy.
"A three judge panel on the 9th Circuit Court of Appeals on Wednesday issued a temporary stay on a moratorium of the military's "don't ask, don't tell" law, meaning the Pentagon can once again enforce the 17-year ban on gays in the military while the Justice Department prepares an appeal."