Conquest Student Housing, a firm accused of using intimidation and fraud against rival developers of off-campus student housing near USC, has agreed to stop challenging any competitors' projects within two miles of the school.

USC and allied developers described the settlement, which was announced Friday, as a victory over a potential monopoly in the off-campus apartment business and as a step to provide more much-needed housing. Conquest said it was pleased that the settlement and a court-approved permanent injunction ended what the company said were false charges against it.

An increasing number of students live on or near USC, and the legal battle reflected the competitiveness of student housing firms in an increasingly lucrative market.

USC and developer Urban Partners sued Conquest in federal court in September, alleging that it was using illegal and harassing tactics to block a proposed complex that would house 1,600 students across the street from the university's main campus, University Park.

In the permanent injunction agreed to by both sides in U.S. District Court, Conquest will drop all legal and regulatory actions against that project, known as University Gateway, and will not try to stop other construction plans near USC. Conquest also will end lawsuits and actions it filed in other communities around the country against Urban Partners' projects.

In exchange, USC and Urban Partners will end their federal suit against Conquest. The suit contended, among other issues, that a Conquest official allegedly described his firm as being like Al Qaeda in trying to scare off rivals in the growing USC housing market.

Michael L. Jackson, USC's vice president of student affairs, said he was pleased with the injunction.

It "allows USC to focus on meeting the housing needs of our students without fear of vexatious litigation designed to monopolize the student housing market around the campus," he said in a prepared statement.

USC owns some of the land at the University Gateway project, at Jefferson Boulevard and Figueroa Street.

Matthew Burton, a principal of Urban Partners, said that he was "elated" by the news and that the injunction would make it much easier to proceed with the construction plan. He said he expected groundbreaking this summer, with completion slated for the 2010-11 school year.

Conquest contended that the federal lawsuit was an attempt to squelch its right to express its concerns about what it said was University Gateway's insufficient parking and other issues.

Attorney Kent Raygor, who represented Conquest, stressed that the settlement was voluntary and did not contain any admission of liability by any party in the case.

The allegations against Conquest were "silly and false," and all sides decided to resolve the matter to avoid the expense and uncertainty of a full trial, he said.

With units for 1,400 students in 19 buildings, Conquest describes itself as the largest provider of off-campus housing near USC.

larry.gordon@latimes.com