Blackwater Banned from Iraq

BAGHDAD, Iraq (CNN) -- Iraq's Interior Ministry has revoked the license of Blackwater USA, an American security firm whose contractors are blamed for a Sunday gunbattle in Baghdad that left eight civilians dead.

Sunday's firefight took place near Nusoor Square, an area that straddles the predominantly Sunni Arab neighborhoods of Mansour and Yarmouk.

In addition to the fatalities, 14 people were wounded, most of them civilians, the official said.

The ministry said the incident began around midday, when a convoy of sport utility vehicles came under fire from unidentified gunmen in the square.

The men in the SUVs, described by witnesses as Westerners, returned fire, and the witnesses said the vehicles are the kind used by Western security firms.

An official with the U.S. Embassy told The Associated Press that a State Department motorcade came under small-arms fire near Nusoor Square, and one of the vehicles was disabled.

The official said no State Department officials were injured but provided no information on Iraqi casualties, the AP reported.

"We have revoked Blackwater's license to operate in Iraq. As of now they are not allowed to operate anywhere in the Republic of Iraq," Interior Ministry spokesman Brig. Gen. Abdul Kareem Khalaf said Monday. "The investigation is ongoing, and all those responsible for Sunday's killing will be referred to Iraqi justice."

Blackwater is one of many security firms contracted by the U.S. government during the Iraq war. An estimated 25,000-plus employees of private security firms are working in Iraq, guarding diplomats, reconstruction workers and government officials. As many as 200 are believed to have been killed on the job, according to U.S. congressional reports.

Some Blackwater personnel died in a grisly incident in Iraq more than three years ago that sparked shock and outrage in the United States.

Four Americans working as private security personnel for Blackwater, all of whom were military veterans, were ambushed, killed and mutilated in March 2004 in Falluja, west of Baghdad.

People close to the company estimate it has lost about 30 employees during the war.

Iraqi authorities have issued previous complaints about shootings by private military contractors, but Iraqi courts do not have the authority to bring contractors to trial, according to a July report from the Congressional Research Service.

The House Oversight and Government Reform Committee estimated in February that nearly $4 billion had been spent on security contracts amid the insurgency that followed the U.S. invasion in 2003 -- costs that have forced the delay, cancellation or scaling back of some reconstruction projects.

Meanwhile, seven people were killed and 31 others were detained Monday in U.S.-led coalition raids across Iraq, the U.S. military said.

The fatalities occurred west of Yusufiya, southwest of the capital, as coalition forces targeted two buildings used by al Qaeda in Iraq militants, who organize suicide attacks.

Armed men at one building drew weapons as troops approached, and the troops "engaged" the two and killed them, the statement said.

They killed four others who were apparently acting as lookouts and another who wouldn't surrender when ordered. Nineteen people were detained, the military said.

Troops arrested other suspects in regions north of the capital -- north of Taji, near Balad, in Baiji and near the Syrian border.

In Baghdad, three people were killed and 11 others were wounded Monday when a parked car detonated near a Shiite mosque on the edge of a densely populated Shiite neighborhood, an Interior Ministry official said.