Iraqi authorities on Monday said they were revoking the license of a private U.S. company that guards top American officials here, accusing the company's employees of killing at least nine people Sunday in central Baghdad.
Whether the Iraqi Interior Ministry will be able to enforce its decision to ban North Carolina-based Blackwater U.S.A. from operating in Iraq is likely to be a major test of wills between the government of Prime Minister Nouri al-Maliki and the United States.
Blackwater, founded by a major Republican Party benefactor, is among the most prominent -- and most controversial -- of dozens of companies that provide security both to government workers and to private individuals in Iraq.
In 2003, the U.S.-led Coalition Provisional Authority exempted the companies and their employees from prosecution under Iraqi law. But Iraqi officials disputed whether that exemption remains in effect, and U.S. officials declined to comment.
"We will work on punishing and stopping the work of the foreign security company that committed the criminal operation in Al-Nisour Square," Maliki told Iraqi state television.
Abdel Karim Khalaf, an Interior Ministry spokesman, said Iraq would seek to try the Blackwater employees for the shootings.
"The Americans helped us build an authentic Iraqi security establishment, and the Iraqi government has stopped the authorization of this company," Khalaf said. "We are waiting for the judicial warrant for the perpetrators."
In an e-mail statement, Blackwater spokeswoman Anne Tyrrell said the company's guards had acted "lawfully and appropriately in response to a hostile attack." She said the Iraqi government hadn't taken any official action to revoke the company's license.
U.S. officials provided few details of the shooting, which took place as Blackwater guards were escorting unidentified State Department officials through a central Baghdad neighborhood.
State Department spokesman Sean McCormack described the incident as a "firefight."
Witnesses said the dead included the driver of one car and a mother and child he was transporting. Police said the dead included five Iraqi police officers who tried to help. At least nine cars were set on fire.
On Monday, the charred white vehicle where the man, mother and child were said to have died was pushed to the side of the road.
Police said 15 people were wounded. None of the dead or wounded was an armed insurgent, police said.
"We believe some innocent life was lost. Nobody wants to see that. But I can't tell you who was responsible for that," McCormack said. He said that Secretary of State Condoleezza Rice called Maliki on Monday to "express regret for the loss of innocent life."
In its statement, Blackwater denied that its contractors had opened fire without provocation. "The 'civilians' reportedly fired upon by Blackwater professionals were in fact armed enemies, and Blackwater personnel returned defensive fire," the statement said.
"Blackwater regrets any loss of life, but this convoy was violently attacked by armed insurgents, not civilians, and our people did their job to defend human life," the statement said. No Blackwater contractor was reported wounded.
U.S. Embassy officials wouldn't comment on whether Blackwater's contract had been suspended.
Price seeks new laws
In Washington, Rep. David Price, D-N.C., said he would continue to press for legislation that would make private security contractors subject to U.S. law and allow the FBI to investigate suspected crimes. He said he'd written Rice, asking her whether she could investigate the incident and bring charges if warranted.
Price said such incidents could undermine U.S. efforts in Iraq. "I think it has the potential to be a real flashpoint. And it may have implications for our mission and our troops," he said.
The role of private security guards in Iraq has been controversial. Iraqi civilians and officials have accused security contractors of abusing their authority.
On Christmas Eve, for example, an off-duty Blackwater contractor shot and killed a bodyguard assigned to Iraqi Vice President Adel Abdul Mehdi. Blackwater quickly flew the contractor back to the United States.
No charges have been filed in that case, or any other, and there was skepticism that participants in Sunday's incident would face punishment, despite statements from Iraqi officials.
"A Blackwater employee is not going to be subject to Iraqi courts," said Scott Silliman, director of the Center on Law, Ethics and National Security at Duke University.
'Are we not human?'
Iraqis expressed dismay at the events.
"This is a disaster. I don't think we have sovereignty in this country while the security companies have the authority to kill Iraqis," said Ahmed Ali, 38, a teacher.
He said he heard the shooting and watched the ambulances respond. "Are we not human beings and is this not our land?"
(N&O Washington correspondent Barbara Barrett and special correspondent Jenan Hussein in Baghdad contributed to this report.)