The US supreme court has upheld an Arizona law allowing the state to shut down businesses that hire illegal immigrants, a ruling arising from the fierce national debate on immigration policy.

The court's majority opinion, written by its chief justice, John Roberts, rejected arguments by business and civil rights groups and the Obama administration that the Arizona law conflicted with federal immigration law and must be struck down.

The supreme court's decision could spur other states and cities to adopt their own tough anti-immigration measures.

The 2007 law backed by the court is different from the strict Arizona law adopted last year and criticised by Barack Obama. It required the police to check the immigration status of anyone in the state suspected of being in the US illegally.

A federal judge and a US appeals court put the newer law's most controversial provisions on hold. Arizona has said it will appeal that ruling to the supreme court.

About 11 million illegal immigrants are believed to be in the US. Immigration has become a huge issue in states such as Arizona on the border with Mexico.

The Arizona law suspends or revokes licences to do business in the state as a penalty against employers who knowingly hire illegal immigrants. It requires employers to use an electronic verification system to check the work authorisation status of employees through federal records.

The Legal Arizona Workers Act was adopted after a federal immigration overhaul law ran aground in Congress in 2007. The Obama administration and Congress have been unable to agree on comprehensive immigration measures.

A US appeals court upheld the Arizona business law, and by a 5-3 vote the supreme court affirmed that ruling. "Arizona has taken the route least likely to cause tension with federal law," Roberts concluded in the 27-page opinion.

Liberal justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor dissented and said they would hold that the Arizona law was pre-empted by federal law.