NEW YORK (Reuters) - A Connecticut church may operate a postal station without violating the constitutional separation of church and state, as long as it clearly distinguishes it from private space, a federal appeals court ruled on Thursday.

A panel of the 2nd U.S. Circuit Court of Appeals said the church in the town of Manchester did violate the U.S. Constitution by including “religious displays” such as prayer cards, pamphlets and church-related videos inside a postal station it had set up.

But it said the church could fix the violations by removing the displays and providing markers that make clear to customers where the postal station ends and church property begins.

Bertram Cooper, a former Manchester resident, had sued the Full Gospel Interdenominational Church and the U.S. Postal Service in 2003, saying the displays made him “very uncomfortable” and constituted government-sponsored religious activity.

A district court judge in 2007 invalidated the displays and the church’s offer to fix some violations. The appeals court vacated that decision.

Chief Judge Dennis Jacobs wrote for the appellate panel that certain displays in the postal unit were religious and therefore illegal.

But the mere fact a postal station is located inside a religious facility, or sponsored by a religious entity, did not violate the Constitution, the ruling said.

The Postal Service allows postal units to be set up on private property in rural areas that cannot sustain full-service offices.

The appeals court directed the church to ensure that the postal counter, post office boxes and shelving are free of religious material. It also ordered the installation of a barrier to make clear where the postal facility ends.

Both sides expressed support for the ruling and the church’s lawyer said he expected it would be able to comply.