Security Under Scrutiny

President Bush has personally ordered his top national security officials to get to the bottom of what happened with Blackwater U.S.A, a private security firm being blamed by the Iraqi government for an incident which left at least 11 Iraqis dead, ABC News' Jonathan Karl has learned.

Defense Secretary Robert Gates has ordered a comprehensive review of the U.S. government's use of security contractors in Iraq.

Today, the U.S. embassy in Baghdad suspended the movement of all official civilian employees outside the Green Zone while the investigation goes forward.

That action bars embassy personnel from visiting Iraqi leaders and ministries located outside the Green Zone, including the oil, defense and justice ministries.

Investigators are looking into whether Blackwater violated rules of engagement the military set up for private security contractors. The rules are secret, but a declassified copy obtained by ABC News says they must "fire only aimed shots" and "with due regard for the safety of innocent bystanders" rules similar to those that apply to U.S. troops.

State Department spokesman Sean McCormack told reporters that contractors are subject to Department of State rules of engagement. "These are defensive in nature. And that those contractors and our employees, when they're attacked, will respond with graduated use of force, proportionate to the kind of fire and attack that they're coming under," he said.

"They can have rules and guidelines but where is the accountability of them if they violate them? Same thing in the rule of law, what legal system holds them accountable if they commit a crime," asked Peter Singer of the Brookings Institute.

New Details: Location of Attack, Private High-Level Meeting

A confidential report from the U.S. Embassy Baghdad titled "Blackwater security detail involved in lethal incident" issued Monday and obtained by ABC News says there were five Blackwater security guards involved in the firefight when a car bomb went off near the entrance to the Izdihar financial compound northwest of the Green Zone.

Subsequent car bombs went off and a firefight erupted, the report said, adding that the fight involved Iraqi police units.

The contractors were operating under extremely dangerous circumstances. The report says the car bomb that set off the incident was "the 6th attack on [embassy] personnel in eight days."

According to the embassy report, none of the Blackwater security guards can be prosecuted in Iraqi courts because the actions they took were in line with the terms of their contract and are covered under a law passed by the U.S.-led Coalition Provisional Authority, but they could face charges in the United States if a crime was determined to have been committed under U.S. law.

That, however, has never happened to a security contractor operating in Iraq.

When asked if the contractors would face legal action, McCormack deferred comment until an internal investigation was complete. "There are a lot of cross-cutting jurisdictional as well as legal authorities here, and you would have to have a precise set of facts in order to be able to determine the various applicable legal authorities and whether or not there was any -- if there were any laws that were broken," he said.

Other details in the confidential report described a meeting Monday between top embassy officials and the Iraqi National Security Adviser Mowaffak al-Rubaie to apologize for the incident. Rubaie told officials this was the fourth incident involving private security contractors within the past month to result in Iraqi fatalities.

Rubaie also noted the timing of the incident was unfortunate, as many Iraqis now perceive a drop in violence, but that may be squelched as any violence involving Westerners is blamed on the U.S. military, and can potentially undermine the goodwill generated by security improvements.

Rubaie proposed establishing a joint commission to investigate this and other incidents involving private security contractors, similar to the commission which investigates incidents in Iraq involving the U.S. military.

The embassy is continuing its investigation, with the report saying they have conducted interviews with 20 American witnesses, including five who were involved in the firefirght and were expected to interview Iraqi police witnesses today.

In light of the incident Iraqi officials had said that Blackwater would banned from operating in Iraq.

However, the spokesman for Iraqi Prime Minister Nouri al-Maliki said Tuesday the company would not be kicked out of the country but stressed the company's staff must "respect the law here in Iraq."