The Supreme Court in Yangon ruled that a lower court's ban on Win Tin, a senior member of Suu Kyi's National League for Democracy (NLD), and the party's vice-chairman, Tin Oo, were lawful and the pair should not be allowed to testify.
"The Supreme Court has turned the appeal down. We still have to talk and decide what we should do," lawyer Nyan Win told Reuters.
Suu Kyi is charged with violating the terms of her house arrest by allowing an American intruder to stay at her home last month, which prosecutors said was a breach of a security law protecting the state from "subversive elements".
Nyan Win said the Supreme Court decided Tin Oo was ineligible as a witness because he was currently under house arrest.
Win Tin, an 80-year-old journalist who served 19 years in prison, was barred because he had criticised the regime on Burmese-language broadcast networks.
Suu Kyi's trial is due to resume at the Yangon District Court on July 3, with testimony expected from the Nobel laureate's one remaining defence witness, Khin Moe Moe, a legal expert.
Diplomats and media reports said U.N. Secretary General Ban Ki-moon was preparing to visit Burma on the same day for talks with the ruling generals.
It was not known exactly why Ban proposed to visit Burma at such a time, or what he hoped to achieve from the mooted two-day trip.
Ban has expressed concern that the junta would use such a visit as propaganda to legitimise Suu Kyi's trial, according to diplomats at the United Nations.
Western governments have dismissed Suu Kyi's prosecution as a "show trial" intended to keep her out of multi-party elections planned next year, which critics say will entrench almost half a century of army rule in the former Burma.
American John Yettaw, who swam across the Inya lake to Suu Kyi's home on May 4 to warn her "terrorists" were planning to assassinate her, is changed under the same security law, as are two of her housemaids.










