Two former employees of the US private security contractor Blackwater, now known as Xe, have been arrested over the killings of two Afghans last year.

Justin Cannon and Chris Drotleff were charged on Thursday with second-degree murder, attempted murder and weapons charges.

The two Afghans were killed, and a third was wounded, in a shooting incident that apparently took place after a traffic accident Kabul on May 5.

The two men have told the Associated Press news agency that they were justified in opening fire on a car that caused an accident in front of their vehicle, then turned and sped towards them.

"I feel comfortable firing my weapon any time I feel my life is in danger," Drotleff said. "That night, my life was 100 per cent in danger."

The indictment, unsealed in a federal court in the US state of Virginia on Thursday, provided no details about the incident other than it occurred at an intersection of two roads in the Afghan capital.

Xe 'co-operation'

Drotleff and Cannon were employed by Paravant LLC, a unit of Xe which was previously known as Blackwater Worldwide, and were providing weapons training to the Afghan National Army.

"Xe Services immediately and fully co-operated with the government's investigation of this tragic incident and terminated the individuals involved for violating company policy," the company said in a statement.

"In respect for the judicial process, the company will not provide further comment."

The latest charges against former employees of the private security contractor came as Xe settled seven cases concerning alleged illegal activities that led to the deaths of an number of Iraqis.

The company said in a statement that they were "pleased" with the settlement, which came after months of negotiations.

Dozens of Iraqis had accused the company of behaviour that led to a culture of recklessness and illegality, including the deaths of several people, and sought compensation through the courts.

Last week, a court dismissed manslaughter charges against five Blackwater security guards who were accused of killing 14 Iraqi civilians in Baghdad in 2007.