The three were arrested Wednesday when police raided an apartment on the city's South Side ahead of the two-day meeting.
Defense attorneys alleged that the arrests were an effort to scare the thousands of people expected to protest at the gathering of world leaders. They told a judge that undercover police were the ones who brought the Molotov cocktails.
"This is just propaganda to create a climate of fear," defense attorney Michael Duetsch said.
Later, outside the courtroom, Duetsch said two undercover police officers or informants who called themselves "Mo" and "Gloves" were also arrested during the Wednesday raid, and defense attorneys said they later lost track of the two.
"We believe this is all a setup and entrapment to the highest degree," Duetsch said.
The trio was charged with providing material support for terrorism, conspiracy to commit terrorism and possession of explosives.
The suspects were each being held on $1.5 million bond. They apparently came to Chicago late last month to take part in May Day protests. Six others arrested Wednesday in the raid were released Friday without being charged.
Chicago police Lt. Kenneth Stoppa declined to elaborate on the case beyond confirming the charges against the three who were still in custody.
Police identified the suspects as Brian Church, 20, of Ft. Lauderdale, Fla.; Jared Chase, 24, of Keene, N.H.; and Brent Vincent Betterly, 24. A police spokesman gave Betterly's hometown as Oakland Park, Mass., but no such town exists. There is an Oakland Park, Fla., that is near Fort Lauderdale.
Activist Bill Vassilakis, who said he let the men stay in his apartment, described Betterly as an industrial electrician who had volunteered to help with wiring at The Plant, a former meatpacking facility that has been turned into a food incubator with the city's backing.
Vassilakis said he thought the charges were unwarranted.
"All I can say about that is, if you knew Brent, you would find that to be the most ridiculous thing you've ever heard. He was the most stand-up guy that was staying with me. He and the other guys had done nothing but volunteer their time and energy," he said.
Betterly appears to have a history of minor run-ins with law enforcement.
He was cited for disorderly intoxication in February in Miami-Dade County, Fla., earlier this year , but the case has been dismissed, according to online court records.
Authorities in Oakland Park, Fla., said Betterly and two other young men walked into a public high school last fall after a night of tequila drinking and took a swim in the pool, according to a report in the South Florida Sun-Sentinel.
They stole fire extinguishers from three school buses, discharged one and smashed a cafeteria window with another. The vandalism caused about $2,000 in damage. Betterly was charged with burglary, theft and criminal mischief, the newspaper said.
Chase grew up in Keene, N.H., and moved to Boston a few years ago before becoming active in the Occupy movement, said his aunt, Barbara Chase of Westmoreland, N.H.
She said she was stunned to learn of the charges against her nephew.
"That surprised me because he's not that dumb, at least I wouldn't have thought so anyway," said Barbara Chase, a factory worker. "He always seemed harmless, but who knows? Outside influences sometimes can sway people to do things that they normally wouldn't do."
Jared Chase's father, Steve Chase, died about five weeks ago after a long struggle with a disease that left him disabled, Barbara Chase said. The family had been waiting for him to come home before having a funeral.
The arrests came as authorities tightened security throughout the city in preparation for the summit, where delegations from about 60 countries will discuss the war in Afghanistan and European missile defense.
Downtown streets were largely empty Saturday, though that is not unusual for a weekend. Security guards stood watch outside many downtown buildings and in some places almost outnumbered pedestrians.
By mid-afternoon, hundreds of protesters marched from a park to the mayor's house, stopping traffic along the way. Police with bicycles stood guard in front of the Northwest Side home, wearing helmets with face shields.
Some of the protesters sat for a time in the middle of the street. Others climbed trees. One woman carried a sign calling Emanuel a bully for closing mental health clinics and libraries in poor neighborhoods. Others chanted that health care should be a human right.
"We are exercising our power to go and tell him what we want," said N'Dana Carter, who was wearing a hospital gown for the demonstration. "He will hear our message."
A city representative said Emanuel respects the demonstrators' First Amendment right to expression.
The bigger show will be on Sunday, the start of the summit, when thousands of protesters are expected to march 2 1/2 miles from a band shell on Lake Michigan to the McCormick Place convention center, where delegates will be meeting.