A Blackwater guard reportedly yelled at colleagues to “stop shooting” during an afternoon of chaos in Baghdad that left 11 Iraqis dead and called into question the accountability of all Western private security firms operating in Iraq.

The US-based company, which protects the American Embassy in the capital and its staff, is at the centre of a storm concerning the September 16 drama, which has enraged the Iraqi Government and sparked a series of investigations.

The controversy involved a car bomb, a shootout at a busy roundabout and a standoff between Blackwater guards and Iraqi security forces, according to an initial embassy report that was seen by The Washington Post.

An American official familiar with the investigation said those involved in the incident claimed that at least one Blackwater guard had drawn a weapon on his colleagues and shouted at them to “stop shooting”, the newspaper reported.

The New York Times also quoted an unnamed US official as saying that one or more of the Blackwater guards had called for a ceasefire.

The word ceasefire “was supposedly called out several times ... They had an on-site difference of opinion,” the official said. Ultimately, a Blackwater guard “got on another one about the situation and supposedly pointed a weapon”, the newspaper reported.

At the same time, the official cautioned against jumping to a conclusion on who was to blame because events could become confused in the heat of a fight.

An Iraqi investigation has concluded that the Blackwater guards fired their guns without provocation. But the US official quoted by The New York Times said the guards told American investigators they believed they had shot in response to hostile fire.

The report by the State Department’s Bureau of Diplomatic Security, which was cited in The Washington Post, was described as a “first blush” of the events that began when the car bomb exploded near a financial compound in western Baghdad while a US official was visiting.

Three Blackwater teams moved to transport the official back to the fortified green zone. Two units returned safely with the official, who was unharmed, but the third team came under fire from “eight to ten” persons” who “fired from multiple nearby locations, with some aggressors dressed in civilian apparel and others in Iraqi police uniforms”, the newspaper quoted the report as saying.

One of the other two teams was re-dispatched to help but during that time the third unit managed to get itself back to the green zone.

As a result, the redeployed Blackwater group found itself in bad traffic at the roundabout at Nisoor Square, confronted by Iraqi police and army.

US soldiers were subsequently sent out to defuse the situation.

A State Department official told The Washington Post that the report was only an initial account that reflected what embassy officers were told by the Blackwater guards immediately after the incident. Details could change, he added.

Blackwater, which employs about 1,000 guards in Iraq, was not immediately available for comment but a spokeswoman was quoted in The New York Times as saying that she could not confirm any of the details provided by the Americans.

A US Embassy spokeswoman in Baghdad said: “We are not commenting on the substance of the investigation.”

US officials were also quoted in both newspapers as questioning the logic of trying to evacuate personnel from the protected compound in the first place rather than remaining inside after the car bomb until the situation was calmer.

Condoleezza Rice, the US Secretary of State, has ordered a review board to visit Iraq next week to assess US diplomatic security practices there after the Blackwater incident.

Emphasising the gravity of the situation, the Pentagon has already dispatched a separate, high-level team to review whether American commanders are policing contractors working for them properly.

The five-man team was sent to Baghdad on Sunday by Robert Gates, the US Defence Secretary, who is under pressure to rein-in private security companies, that have earned a reputation in Iraq for being aggressive and trigger-happy.

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