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Iraq Bans Security Contractor

Normally, he said, the procedure is to try to get out of the ambush zone, but in this case one of the Blackwater vehicles was disabled by gunfire.

Under such circumstances, Blackwater personnel are authorized to use "aimed fire" directed only at people with weapons. "If there is an extraction of our people, they can return fire to defend themselves," Strong said. He said no Blackwater employees were wounded and all escaped.

Blackwater is conducting its own investigation of the event, he said, and would cooperate with the State Department's inquiry. He said that in the past week, one of Blackwater's helicopters had been shot down and at least two other attacks on convoys had taken place.

U.S. Embassy officials would not speculate on how the Iraqi government's decision might affect their work with Blackwater. Secretary of State Condoleezza Rice called Prime Minister Nouri al-Maliki to apologize about the episode and promised to investigate, Maliki's office said in a statement.

Rice also expressed her regret over the death of innocent civilians in the incident, State Department spokesman Tom Casey said.

The incident highlighted the murky legal space that private foreign security contractors occupy in Iraq. Some security experts said it is unlikely that the Iraqi government could expel Blackwater because its contract is through the State Department.

A regulation known as Order 17, which was established under the U.S.-led Coalition Provisional Authority headed by L. Paul Bremer and is still in effect, granted American private security contractors immunity from prosecution in Iraqi courts.

Pentagon officials have said that at least 20,000 private security guards operate in Iraq. The International Contractors Association, a private trade group, said recently that the number could be as high as 50,000 and includes guards from dozens of countries, including thousands of Iraqis employed by foreign companies.

Another memorandum by the now-disbanded occupation authority requires private security companies to register for a license with the Interior Ministry, but some of the companies in Iraq operate without doing so. A June 2004 letter from the occupation authority to private security companies says the companies "will not operate without appropriate licenses" from the Iraqi government.

"I think the bottom line is that MOI does have the right -- if not the ability -- to limit Blackwater operations," said one Western official familiar with the Ministry of Interior who was not authorized to speak publicly.

In the past seven months, the Iraqi government has suspended the licenses of two private security companies but reinstated them after a review, said Lawrence T. Peter, director of the Private Security Company Association of Iraq.

The occupation authority permitted security contractors to use deadly force in cases of self-defense and specified that they should make "every effort to avoid civilian casualties," "fire only aimed shots" and take "due regard for the safety of innocent bystanders."

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