BOSTONBOSTON (Reuters) - Twelve former U.S. soldiers challenged the government's "Don't ask, don't tell" policy that bars openly declared gays from the military, telling a federal court on Wednesday it forced them into a life of lies.

The six men and six women asked the 1st U.S. Circuit Court of Appeals in Boston to reverse a lower court ruling dismissing their constitutional challenge to the 14-year-old law, which is attracting fresh debate as President George W. Bush seeks to increase the size of the armed forces amid the wars in Iraq and Afghanistan.

They are seeking reinstatement in the military.

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"This case is about fundamental issues of equality, freedom and identity," said Dixon Osburn, executive director of the Servicemembers Legal Defense Network, representing the former soldiers in the case, Cook v. Gates.

Under the law, the military cannot ask if a service member is gay, but it can discharge those who say they are gay or have engaged in homosexual conduct or attempted to form a same-sex civil union or marriage.

Osburn said the U.S. Supreme Court "changed the legal landscape very profoundly" by striking down laws that made homosexual sex a crime in the case of Lawrence v. Texas in 2003. Past challenges to the law were made before that ruling.

The U.S. military argues that banning gays from the military is critical to maintaining a unit's "cohesion," the trust among service members crucial to combat effectiveness.

"The policy was forcing me into a lot of positions where I felt like I had to lie even in simple everyday situations," said Jenny Lynn Kopfstein, 31, a former lieutenant junior grade in the U.S. Navy who was dismissed in 2002.

U.S. District Judge George O'Toole dismissed the suit last April, ruling Congress had authority to bar gays and lesbians from the military and had made a rational decision when adopting the policy during the Clinton administration.

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'DIFFICULT TO LIVE'

Kopfstein said she wrote a letter to her commanding officer in 2000 admitting she was a lesbian "because it's very hard to serve under the policy and it was against my internal code of ethics to lie and I didn't want to lie anymore.

"People would say, 'What did you do last weekend?' and I couldn't fully tell them 'I went to dinner with my partner.' You can't say those types of things without getting kicked out, so it's actually very, very difficult to live under the policy," she said in an interview after the hearing.

"They teach you in the military that honor and integrity are important above all things, so it's very contradictory."

She said she served in the Navy for two years and four months after admitting she was gay, including a deployment to the Middle East.

The military has dismissed more than 11,000 people for Don't Ask, Don't Tell violations, official statistics show.

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Harassment of gays, however, is prohibited. The Pentagon, in a 2000 memo to the armed services and commanders, said that "mistreatment, harassment and inappropriate comments or gestures" based on sexual orientation were not acceptable.

That followed a report from the Defense Department's inspector general that found 80 percent of service members surveyed had heard anti-gay comments and 37 percent had witnessed harassment against people thought to be homosexual.

Two other cases are challenging the constitutionality of the law in appeals courts, Osburn said.