Soldier 'a pacifist'
His case has attracted sympathy from human rights groups and peace activists, who say Aguayo is representative of a growing number of soldiers who disagree with the US military operation in Iraq.
A group called the Iraq veterans against war, which seeks to help dissenting soldiers, has described him as a "pacifist who refused to put bullets in his gun during his service in Iraq because he does not believe in killing people".
Aguayo is due to appear before the US military tribunal in Wurzburg in southern Germany on Tuesday.
David Court, Aguayo's lawyers, said: "He realises what he has done. But he hopes that the sentence will be considerably less than seven years."
A verdict is expected later late on Tuesday or Wednesday.