White House officials said the order did not create a military tribunal or a list of terrorists to be tried.
He said officials were looking to create a tribunal that would have the stature to be seen as free of American control.
Chilean and American officials said the two countries had reached an agreement to create an international tribunal to determine the amount of compensation.
Negotiations to create a tribunal have been punctuated by breakthroughs that came to nothing.
It would also create an independent tribunal to hear tax appeals, now heard by the same agency that assesses taxes.
The designation can be made by any "competent tribunal" created by the president or secretary of defense.
Despite the more deliberate pace of creating military tribunals, the Defense Department is starting to find people to staff the system, officials said.
"One, probably the best, would be to create an international tribunal on the order of the tribunals for the former Yugoslavia and Rwanda," he said.
"But what the Workers' Party government will not do is create a political tribunal to judge the behavior of the armed forces during the military dictatorship."
A13 A plan to create special tribunals for foreigners accused of terrorism was withdrawn by the Administration.