Iraq PM criticizes Blackwater

By Waleed Ibrahim and Dean Yates

BAGHDAD (Reuters) - Iraqi Prime Minister Nuri al-Maliki suggested on Wednesday the U.S. embassy stop using American security firm Blackwater after a deadly shooting and said he would not allow Iraqis to be killed in "cold blood".

Iraq has said it would review the status of all security firms after what it called a flagrant assault by Blackwater contractors in which 11 people were killed while the firm was escorting a U.S. embassy convoy through Baghdad on Sunday.

With emotions running high, U.S. civilian officials have been barred from road travel in Iraq outside Baghdad's heavily fortified Green Zone because of possible attacks.

The two governments also set up a joint commission to review diplomatic security.

"We will not allow Iraqis to be killed in cold blood ... What happened was a crime. It has left a deep grudge and anger, both inside the government and among the Iraqi people," Maliki told a news conference.

"It is in (our) interests to freeze the work of this company and the embassy can travel with other companies."

The shooting has incensed Iraqis who regard the tens of thousands of security contractors working in the country as private armies that act with impunity.

At issue for many Iraqis is sovereignty, given that security firms appear to have immunity from Iraqi law under a 2004 regulation written while Iraq was under U.S. administration following the toppling of Saddam Hussein the year before.

The Interior Ministry has said Sunday's incident was sparked when Blackwater guards opened fire indiscriminately after mortar rounds landed near their convoy in western Baghdad.

Blackwater is one of the biggest private security operators in Iraq and protects the U.S. embassy. It said its guards reacted "lawfully and appropriately" to a hostile attack. Maliki said that account was "not accurate".

Maliki said Blackwater's work had been halted but he did not say its license had been revoked. He said the Interior Ministry had recorded seven violations against the firm. He did not elaborate.

Iraqi government spokesman Ali al-Dabbagh said on Tuesday the cabinet had backed an Interior Ministry decision to "halt the license" of Blackwater.

INCREASED THREAT

In a statement seen by Reuters and sent to Americans in Iraq, the U.S. embassy in Baghdad said the temporary ban on road travel was imposed to reassess security procedures.

"In light of the serious security incident involving a U.S. embassy protection detail ... the embassy has suspended official U.S. government civilian ground movements outside the International Zone (IZ) and throughout Iraq," it said.