Grounded: U.S. Embassy Staff in Iraq Going Nowhere

The United States has grounded all civilian government employees in Iraq after the alleged killing of nine Iraqis on Sunday by Blackwater USA, a private security company.

A warden's message issued by the U.S. Embassy in Baghdad today said: "In light of the serious security incident involving a U.S. Embassy protection detail in the Mansour District of Baghdad on Sunday, September 16, 2007, the Embassy has suspended official U.S. government civilian ground movements outside the International Zone (IZ) and throughout Iraq."

Blackwater contractors were escorting a group of U.S. Embassy employees Sunday when a car bomb went off nearby in western Baghdad. As the Blackwater security team extracted the embassy staff from the location, a firefight developed and nine Iraqis were killed and 15 were wounded. No Americans were injured or killed.

Blackwater in a statement said its "contractors acted lawfully and appropriately in response to a hostile attack." Iraqi eyewitnesses told ABC News that the contractors were firing randomly at civilians on a busy street in the middle of the day.

The Iraqi government reacted angrily to the incident — Prime Minister Nouri Kamel al-Maliki called it a crime and the Iraq Interior Ministry said that it would revoke Blackwater's license to operate in the country and that it wanted the company expelled.

The North Carolina-based Blackwater has about 980 employees in Iraq providing security to the U.S. Embassy. The company, founded by former Navy SEALs, has been involved in a number of controversial fatal shootings of Iraqis in the past, and many Iraqis feel private security contractors are too trigger happy.

Unlike U.S. military personnel, private security contractors appear to fall into a legal gray area. They are not subject to prosecution by Iraqi courts unless the U.S. government hands them over, which is highly unlikely. There is also no clear precedent for prosecuting them in the United States.