The last terror trial at Guantánamo Bay has been halted after the senior military judge dropped charges against a suspect in the bombing of the USS Cole in 2000, the Pentagon has said.

The military prosecution of the suspected al-Qaida bomber Abd al-Rahim al-Nashiri was the last active war crimes case at the US navy base in Cuba.

The decision by Susan Crawford, the top legal authority for military trials at Guantánamo, brings all cases into compliance with Barack Obama's executive order to halt proceedings at the base.

The announcement came on the eve of a meeting at the White House today when the president will hear from the families of those killed in the Cole bombing and in the September 11 attacks.

A Pentagon spokesman said Crawford dismissed the charges against al-Nashiri without prejudice, meaning new charges can be brought later. He will remain in prison.

"It was her decision, but it reflects the fact that the president has issued an executive order which mandates that the military commissions be halted, pending the outcome of several reviews of our operations down at Guantánamo," the spokesman said.

The ruling gives the White House time to review the legal cases of all 245 ­terror suspects held at Guantánamo and to decide whether they should be prosecuted in the US or released to other nations.

Seventeen US sailors died on 12 October 2000 when al-Qaida suicide bombers steered an explosives-laden boat into the Cole, a guided-missile destroyer, as it sat in a Yemen port. The Pentagon charged Nashiri, a Saudi Arabian, last summer with "organising and directing" the bombing and planned to seek the death penalty in the case.

In his 22 January order, Obama promised to shut down the Guantánamo prison within a year. The order froze all detainees' legal cases pending a three-month review.

Two military judges granted Obama's request for delays in their cases. A third military judge, Colonel James Pohl, defied Obama's order by scheduling an arraignment for Nashiri, saying that a delay would not be "in the interest of justice". That left the decision on whether to continue to Crawford, whose delay on announcing a decision prompted concern at the Pentagon that she would allow the court process to continue.

Last year, al-Nashiri said during a Guantánamo hearing that he confessed to helping plot the Cole bombing only because he was tortured by US interrogators. The CIA has admitted he was among terror suspects subjected to waterboarding, which simulates drowning, in 2002 and 2003 while being interrogated in secret CIA prisons.

Ahead of today's meeting, a White House statement said Obama wanted to "talk with these families about resolving the issues involved with closing Guantánamo Bay – while keeping the safety and security of the American people as his top priority."

Among those due to meet the president is the former commander of the Cole, retired navy commander Kirk Lippold, who has been critical of the decision to close Guantánamo.

"I'm going to listen," he said. "The families have already been through enough. Don't put the families through even more of this agony."

The retired New York fire chief Jim Riches, whose son was killed at the World Trade Centre, is another of those invited. "My concern is these guys killed my son and I'd like to see justice served on them," he said yesterday. "I'd like to see Guantánamo stay open but my main concern is that we get the justice we deserve."

Riches added: "It shows that he's reaching out to the people. At least we'll get to voice our opinion."