Condoleezza Rice, the secretary of state, and Robert Gates, the defence secretary, met on Tuesday to discuss a working group's recommendations to give the US military "considerably more involvement in contractor operations", the Pentagon said.
 
Gates and US commanders have expressed concern that contractors' actions could undermine the US mission in Iraq.
 
Contractor's defence
 
Blackwater says its guards acted lawfully after being shot at, but the Iraqi government says the guards "deliberately killed" the 17 people.

 

Erik Prince, the founder of the firm, which employs 1,000 people in Iraq to protect US diplomats and other officials, told a US congressional hearing that his men had come under small-arms fire and "returned fire at threatening targets".

 

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Media reports on Tuesday said that prosecuting guards involved in the September 16 incident in Baghdad could be complicated by a grant of limited immunity offered by state department investigators.
 
US government officials acknowledged that state department investigators gave limited immunity to the Blackwater guards involved in the shooting, preventing their statements being used against them.
 
But officials said on Tuesday that the men could still be subject to prosecution using other evidence gathered in the investigation, which is now being led by the FBI.
 
"Any suggestion that the Blackwater employees in question have been given immunity from federal criminal prosecution is inaccurate," Dean Boyd, a justice department spokesman, said.
 
Approval pending
 
Geoff Morrell, the Pentagon press secretary, said a working group would take its plans to Baghdad next month for approval by military commanders and Gates hoped to have the new arrangements finalised by November 22.
 
However, the agreement appeared to fall short of a deal putting contractors under the command of the military, as Pentagon officials had suggested.
 
Sean McCormack, the state department spokesman, said from a practical standpoint it was decided not to put contractors under military command.
 
Iraq says there are more than 180 mainly US and European security firms in the country, with estimates of the number of individual security contractors between 25,000 and 48,000.

Iraqi legislation
 
On Tuesday, the Iraqi cabinet approved draft legislation that would end the immunity from prosecution of foreign security contractors working in the country.
 
The law still needs to be passed by parliament.

 

Speaking after a cabinet meeting, Ali al-Dabbagh, an Iraqi government spokesman, said: "The cabinet has approved a law that will put non-Iraqi firms and those they employ under Iraqi law.

 

Blackwater has about 1,000 employees in Iraq
protecting diplomats and officials [EPA]

"Also, all immunity given to them under Order 17 is cancelled."

 

Order 17 was a decree issued by Paul Bremer, who ran the US occupation government until June 2004, in the days before power was handed over to an interim Iraqi government.

 

The measure gave foreign contractors immunity from prosecution in Iraq.

 

The draft law proposes tightening controls on foreign security firms by making them register and apply for a licence to work in Iraq, and for all guards to have weapons permits. That process has begun but has been mired in bureaucracy.

 

Contractors who enter Iraq with a US department of defence identity card would in future have to apply for entry visas.

Source: Agencies