Sen. Joe Lieberman (Conn.) should caucus with Democrats despite his campaign attacks against President-elect Barack Obama, one of the chamber’s most conservative Democrats said this week.

Sen. Ben Nelson (Neb.) is the latest Democrat to suggest Lieberman, who was the party’s vice presidential nominee in 2000, not be banned from the party, and he offered another sign that the party seems willing to mend relations with the independent senator. Obama has also expressed that sentiment, but the president-elect and Senate Democrats are stopping short on whether he should face any retribution, including the loss of his chairmanship of a powerful committee.

"His vote has been very important to us on numerous occasions," Nelson said.

Nelson said he told Senate Majority Leader Harry Reid (D-Nev.) that he would ultimately defer to him on whether Lieberman should lose his chairmanship of the Homeland Security and Governmental Affairs Committee as punishment for his defection during the campaign season.

"I know there are going to be people who have different views, and want to see him removed from that position," Nelson said. "Quite honestly, I think it’s time to get back together."

Democrats are torn over how to handle Lieberman, who became an independent after losing his 2006 Senate Democratic primary to a businessman who ran on a platform opposing the Iraq war, which Lieberman supports.

Some Democrats are wary that Lieberman — who attacked Obama as unprepared and dangerous — may use his subpoena power and position as chairman of a key committee to undermine the president-elect's agenda.

But Democrats are wary of looking vindictive as Obama talks about unifying the country. Plus, Democrats are so far three seats short of a filibuster-proof majority, and will need Lieberman's help to advance Obama's agenda.

Obama reportedly has told Reid that he wants Lieberman to remain in the Democratic conference, but he has not weighed in on the chairmanship issue. 

"We aren't going to referee decisions about who should or should not be a committee chair," said Stephanie Cutter, a spokeswoman for the Obama transition team. "President-elect Obama looks forward to working with anyone to move the country forward. We'd be happy to have Sen. Lieberman caucus with the Democrats. We don't hold any grudges.”

That position has given Senate Democrats leeway to punish Lieberman by stripping him of his gavel. But doing so would likely spur Lieberman to leave the party and caucus with Republicans, though he would wield less power in the minority party and hurt his popularity in his heavily Democratic-leaning state.

"It would be foolish to sacrifice that vote," a Democratic aide said of effectively pushing Lieberman out of the caucus. "The reality is votes are more important than hurt feelings.”

But others say Lieberman should pay for his campaign tactics.

"It’s about answering for his actions," a senior Democratic aide said.

Also staying out of the fight are the Clintons. Despite reports that Bill Clinton had made calls on Lieberman's behalf, his spokesman says that the former president is staying out of the fight. His wife, Sen. Hillary Rodham Clinton (D-N.Y.) also punted when asked at a press conference Tuesday, saying the issue will be sorted out Nov. 18 during internal conference deliberations.

And Lieberman's fellow Connecticut senator, Democrat Christopher Dodd, told local reporters that he believes that Obama wouldn't "necessarily want to spend the first month of this president-elect period, this transition period, talking about a Senate seat, particularly if someone is willing to come forward and is willing to be a member of your family in the caucus in that sense." 

Despite his support for Sen. John McCain (R-Ariz.) for president, Lieberman said after the election that he's ready to work with Obama to advance his agenda.

Reid met with Lieberman last week, and the majority leader reportedly offered him a lesser chairmanship, which Lieberman rejected.

If the two can't reach a deal before the conference meets next week, his chairmanship and role in the caucus could be put to a secret vote.

"It is a Reid and conference decision," Nelson said. "I’m prepared to live with whatever the result is."

A Lieberman spokesman declined to comment.