BAGHDAD -- The Iraqi government said Monday that it was revoking the license of an American security firm accused of involvement in the deaths of eight civilians in a firefight that followed a car bomb explosion near a State Department motorcade.
The Interior Ministry said it would prosecute any foreign contractors found to have used excessive force in the Sunday shooting. It was the latest accusation against the U.S.-contracted firms that operate with little or no supervision and are widely disliked by Iraqis who resent their speeding motorcades and forceful behavior.
Underscoring the seriousness of the matter, the State Department said Secretary of State Condoleezza Rice planned to call Iraqi Prime Minister Nouri al-Maliki to express regret and assure him that the U.S. has launched an investigation into the matter to ensure nothing like it happens again.
Interior Ministry spokesman Abdul-Karim Khalaf said eight civilians were killed and 13 were wounded when contractors believed to be working for Blackwater USA opened fire in a predominantly Sunni neighborhood of western Baghdad.
"We have canceled the license of Blackwater and prevented them from working all over Iraqi territory. We will also refer those involved to Iraqi judicial authorities," Khalaf said.
The spokesman said witness reports pointed to Blackwater involvement but said the shooting was still under investigation. It was not immediately clear if the measure against Blackwater was intended to be temporary or permanent.
Blackwater, based in Moyock, N.C., provides security for many U.S. civilian operations in the country.
The secretive company, run by a former Navy SEAL, has an estimated 1,000 employees in Iraq and at least $800 million in government contracts. It is one of the most high-profile security firms in Iraq, with its fleet of "Little Bird" helicopters and armed door gunners swarming Baghdad and beyond.
Phone messages left early Monday at the company's office in North Carolina and with a spokeswoman were not immediately returned.
The U.S. Embassy said a State Department motorcade came under small-arms fire that disabled one of the vehicles, which had to be towed from the scene near Nisoor Square in the Mansour district.
"There was a convoy of State Department personnel and a car bomb went off in proximity to them and there was an exchange of fire as the personnel were returning to the International Zone," embassy spokesman Johann Schmonsees said, referring to the heavily fortified U.S.-protected area in central Baghdad also known as the Green Zone.
Officials provided no information about Iraqi casualties but said no State Department personnel were wounded or killed.
The embassy also refused to answer any questions on Blackwater's status or legal issues, saying it was seeking clarification on the issue as part of the investigation.
Al-Maliki late Sunday condemned the shooting by a "foreign security company" and called it a "crime."
State Department spokesman Sean McCormack said the United States had not been notified of any Iraqi government decision to revoke Blackwater's license and declined to speculate as to how that might affect State Department activities if it happened.
"The bottom line is that the secretary wants to make sure that we do everything we possibly can to avoid the loss of innocent life," McCormack told reporters in Washington.
The decision to pull the license was likely to be challenged, as it would be a major blow to a company at the forefront of one of the main turning points in the war.
The 2004 battle of Fallujah - an unsuccessful military assault in which an estimated 27 U.S. Marines were killed, along with an unknown number of civilians - was retaliation for the killing, maiming and burning of four Blackwater guards in that city by a mob of insurgents.
Tens of thousands of foreign private security contractors work in Iraq - some with automatic weapons, body armor, helicopters and bulletproof vehicles - to provide protection for Westerners and dignitaries in Iraq as the country has plummeted toward anarchy and civil war.
Monday's action against Blackwater was likely to give the unpopular government a boost, given Iraqis' dislike of the contractors.
Interior Minister Jawad al-Bolani called the shootings "a crime that we cannot be silent about."
Many of the contractors have been accused of indiscriminately firing at American and Iraqi troops, and of shooting to death an unknown number of Iraqi citizens who got too close to their heavily armed convoys, but none has faced charges or prosecution.
"There have been so many innocent people they've killed over there, and they just keep doing it," said Katy Helvenston, the mother of Steve Helvenston, a Blackwater contractor who died during the 2004 ambush in Fallujah. "They have just a callous disregard for life."
Helvenston is now part of a lawsuit that accuses Blackwater of cutting corners that ultimately led to the death of her son and three others.
The question of whether they could face prosecution is legally murky. Unlike soldiers, the contractors are not bound by the Uniform Code of Military Justice. Under a special provision secured by American-occupying forces, they are exempt from prosecution by Iraqis for crimes committed there.
Khalaf, however, denied that the exemption applied to private security companies.
Iraqi police said the contractors were in a convoy of six sport utility vehicles and left after the shooting.
"We saw a convoy of SUVs passing in the street nearby. One minute later, we heard the sound of a bomb explosion followed by gunfire that lasted for 20 minutes between gunmen and the convoy people who were foreigners and dressed in civilian clothes. Everybody in the street started to flee immediately," said Hussein Abdul-Abbas, who owns a mobile phone store in the area.
Associated Press writers Qassim Abdul-Zahra in Baghdad and Matthew Lee in Washington contributed to this report.