BAGHDAD, 18 September 2007 — The Iraqi government yesterday ordered Blackwater USA, the American security firm that protects US diplomats, to stop work and leave the country after the fatal shooting of eight Iraqi civilians following a car bomb attack against a State Department convoy.

The order by the Interior Ministry, if carried out, would deal a severe blow to US government operations in Iraq by stripping diplomats, engineers, reconstruction officials and others of their security protection.

But the presence of so many visible, aggressive Western security contractors has angered many Iraqis, who consider them a mercenary force that runs roughshod over people in their own country.

Secretary of State Condoleezza Rice telephoned Prime Minister Nuri Al-Maliki late yesterday and the two agreed to conduct a “fair and transparent investigation” and punish any wrongdoers, said Yassin Majid, an adviser to the prime minister.

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 on civilians in the predominantly Sunni neighborhood of Mansour. “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,” Khalif said.

He said witness reports pointed to Backwater involvement but added that the shooting was still under investigation. One witness, Hussein Abdul-Abbas, said the explosion was followed by about 20 minutes of heavy gunfire and “everybody in the street started to flee immediately.”

US officials refused to discuss Iraqi casualties, nor would they confirm that Blackwater personnel were involved. They also refused to explain the legal authority under which Blackwater operates in Iraq or say whether the company was complying with the order.

The incident drew attention to one of the controversial American practices of the war — the use of heavily armed private security contractors who Iraqis complain operate beyond the control of US military and Iraqi law.

Iraqi officials were quick to condemn the foreign guards. Maliki condemned the shooting by a “foreign security company” and called it a “crime.” Interior Minister Jawad Al-Bolani described the shooting as “a crime about which we cannot be silent.”