The decision comes three days after President Bush opened voluntary vaccination to emergency workers and two weeks after the state Division of Public Health said Grady would be one of the first Georgia hospitals offered the vaccine.

"Grady has balanced the known dangers of the smallpox vaccine, which can in some instances cause serious side effects, against the unlikely risk of exposure to the smallpox virus," spokeswoman Karen Frashier said in a statement Monday evening.

"Grady will not vaccinate its health care workers for smallpox at this time, but would move rapidly to vaccinate health care workers if a case of smallpox is reported, or a clearly imminent danger of smallpox transmission is shown to exist."

The hospital's decision took the state division by surprise. A letter asking hospitals to estimate how many staff might agree to vaccination has not even been mailed, said Dr. Kathleen Toomey, state health director.

"I am not concerned. I think it's a reflection of the fact that we have done our job in making people realize that this vaccination is voluntary," Toomey said Monday evening. "We are not strong-arming them in any way."

The federal government decided to relaunch vaccination against smallpox, which has not been used in the United States since 1972, based on fears that rogue regimes, such as Iraq and North Korea, might use the highly infectious, frequently fatal disease as a weapon.

In making the vaccine available once again, officials have underlined the side effect risks. For every 1 million vaccinations, the Atlanta-based Centers for Disease Control and Prevention estimates, there will be one to two deaths; 14 to 52 life-threatening reactions, including gangrene, encephalitis and severe skin infections; and 50 to 900 other side effects, such as rashes, fevers and viral eruptions far from the vaccination site.

The federal smallpox policy, announced Friday, calls for mandatory vaccination for about 510,000 military personnel and voluntary vaccination for about 440,000 civilian smallpox-response teams and emergency-room staff.

As part of that, Georgia intends to offer the vaccine initially to about 500 civilians, a plan that is considerably more conservative than those crafted by states such as New York and California.

Georgia's plan calls for vaccinating up to 15 doctors and nurses at each of the state's 15 trauma centers, as well as teams of roughly 15 people in each of the state's 19 health districts. Because the state plan calls for vaccinations to begin in metro Atlanta, Grady staff would have been among the first to receive the shot.

As Georgia's largest public hospital, and one of only two Level One trauma centers in the state, Grady's decision could influence other institutions that are still debating whether to offer their staff the vaccine.

The decision was made by the hospital's infection control committee. Members declined to comment Monday.

Grady is jointly staffed by physicians from the Emory University and Morehouse schools of medicine. Dr. Carlos del Rio, an Emory professor who heads that school's medical service at Grady, supported the decision Monday on behalf of his staff.

"I see no immediate threat of smallpox happening," he said. "At this point in time, the risk of the vaccine far outweighs the the benefit of getting the vaccine."

The vaccine could be justified now for a military member being deployed to Iraq, he added, or for a lab worker who handles either smallpox or the related virus used to make the vaccine. But in a hospital full of sick patients -- many of them with weak immune systems, which increase the risk of vaccine complications -- it cannot be justified yet, he said.

"I don't want recently vaccinated people running around our clinics and our wards," he said. "Even though the risk is small, there will be a risk of the vaccine virus being disseminated to somebody."

Similar concerns are being expressed by other hospitals, Toomey said. "We are hearing about issues of liability for vaccine injury, and issues of workmen's compensation -- in the rare but possible event of a complication, how are the hospitals going to pay?"

According to federal officials, new laws that go into effect Jan. 24 will protect anyone who administers the vaccine, including a hospital or an individual physician, against liability; anyone who experienced a bad reaction would have to sue the federal government.

Officials have not fully defined how claims of compensation for health care costs or lost work time would be handled. Over the weekend, Health and Human Services Secretary Tommy Thompson said compensation would come first from state workers' comp laws, which vary from state to state. He suggested the issue might be taken up by Congress, but said his department is not planning to submit legislation.

Grady has not refused to participate in the broad smallpox-emergency planning that the state is doing, Toomey added.

"They've been a key player, and we're sure they will continue to be even though they have made a decision not to have their staff get vaccinated," she said. "In my 10 years in Georgia, I've never seen such cooperation between hospitals and public health."

The federal vaccination plan calls for the smallpox vaccine to be offered in phases: first, to the 1 million military and emergency-team members; second, to up to 10 million health care workers, police, fire and first responders. In that second phase, up to 3,000 Georgians will be offered vaccination, Toomey said.

"I am sure we will get some people vaccinated," she said.

If the risk of a smallpox attack appears to increase, Grady will re-evaluate, Frashier said Monday. Unlike most vaccines in use, the smallpox vaccine protects against the disease even if it is administered a few days after exposure to the virus.

Unless the picture changes, del Rio said, there could be grave consequences to alarmed Americans over-reacting and seeking the vaccine.