WASHINGTON - The federal government is making progress on developing a surveillance system that would pair computers with video cameras to scan crowds and automatically identify people by their faces, according to newly disclosed documents and interviews with researchers working on the project.

The Department of Homeland Security recently tested a crowd-scanning project called the Biometric Optical Surveillance System — or BOSS — after two years of government-financed development. Although the system is not ready for use, researchers say they are making significant advances on it. That alarms privacy advocates, who say that now is the time for the government to establish oversight rules and limits on how it will ­someday be used.

There have been stabs for more than a decade at building a system that would help match faces in a crowd with names on a watch list — whether in searching for terrorism suspects at high-profile events like a presidential inaugural parade, looking for criminal fugitives in places like Times Square or identifying card cheats in crowded casinos.

The automated matching of close-up photographs has improved greatly in recent years, and companies like Facebook have experimented with it using still pictures.

But even with advances in computer processing power, the technical hurdles involving crowd scans from a ­distance have proved to be far more challenging. Despite occasional much-hyped tests, including as far back as the 2001 Super Bowl, technical specialists say crowd scanning is still too slow and unreliable.

The release of the documents about the government's efforts to overcome those challenges comes amid a surge of interest in surveillance matters inspired by the leaks by Edward J. Snowden, the former National Security Agency contractor. Interest in video ­surveillance has also been fueled by the attack on the Boston Marathon, where the bombers were identified by officials looking through ­camera footage.

In a sign of how the use of such technologies can be developed for one use but then expanded to another, the BOSS research began as an effort to help the military detect potential suicide bombers and other terrorists overseas at "outdoor polling places in Afghanistan and Iraq," among other sites, the documents show. But in 2010, the effort was transferred to the Department of Homeland Security to be developed for use instead by the police in the United States.

After a recent test of the system, the department recommended against deploying it until more improvements could be made. A department official said the contractor was "continuing to develop BOSS," although there is no sign of when it may be done.

But researchers say progress has been made, and independent specialists say it is virtually inevitable that someone will make the broader concept work as camera and computer power continue to improve.

"I would say we're at least five years off, but it all depends on what kind of goals they have in mind" for such a system, said Anil Jain, a specialist in computer vision and biometrics engineering at Michigan State University who was not involved in the BOSS project.

$5.2 million federal contract

The effort to build the BOSS system involved a two-year, $5.2 million federal contract given to Electronic Warfare Associates, a Washington-area defense contractor with a branch office in Kentucky. The company has been working with the laboratory of Aly Farag, a University of Louisville computer vision specialist, and the contract was steered to the firm by an earmark request in a 2010 appropriations bill by Sen. Mitch McConnell of Kentucky, the Republican leader.

Significant progress is already being made in automated face recognition using photographs taken under ideal conditions, like passport pictures and mug shots. The FBI is spending $1 billion to roll out a "Next Generation Identification" system that will provide a national mug shot database to help the local police verify identities.

But surveillance of crowds from a distance — in which lighting and shadows vary, and faces tend to be partly obscured or pointed in random directions — is still not reliable or fast enough. The BOSS research is intended to overcome those challenges by generating far more information for computers to analyze.

The system consists of two towers bearing "robotic camera structures" with infrared and distance sensors. They take pictures of the same subject from slightly different angles. A computer then processes the images into a "3-D signature" built from data like the ratios between various points on someone's face to be compared against data about faces stored in a watch-list database, the documents show.

The Homeland Security Department hired the Pacific Northwest National Laboratory to test the BOSS system at an arena in Kennewick, Wash. The plan was to use 30 volunteers whose facial data would be mingled in a database among 1,000 mug shots to see whether the system could reliably recognize when any of the volunteers were present.

The agency set up six tests to determine the technology's overall accuracy, determining afterward that "it was not ready for a DHS customer."