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.

Blackwater, one of many security firms contracted by the U.S. government during the Iraq war, provides protection for American diplomats.

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.

A spokesman for the U.S. Embassy in Baghdad confirmed a State Department convoy was in the area.

"We are taking it very seriously. We are cooperating with the Iraqi government on several different levels and will continue this cooperation with Iraqi officials," the embassy official said.

"We will continue to work and address these issues with our Iraqi counterparts on a variety of levels."

There has been insurgent activity in Yarmouk and Mansour, the location of many foreign embassies. Many Western contractors had been based in Mansour at one time but moved out because of insurgent violence and kidnappings.

"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.