Blackwater faces the threat of prosecution in Iraq after an Iraqi investigation found that guards from the US security company opened fire without provocation in Baghdad last month, killing 17 civilians — six more than previously reported.

The US Embassy in Iraq, however, said today that a range of issues concerning private security companies, such as jurisdiction, were still being considered by a joint American-Iraqi commission, which will then make policy recommendations.

The Iraqi inquiry into the September 16 shootout in west Baghdad concluded that a Blackwater convoy did not come under fire — direct or otherwise — before its guards began shooting. “It was not even hit by a stone,” said Ali al-Dabagh, the Government spokesman, in a statement released yesterday.

“Employees of the company violated the rules governing use of force by security companies,” Dr Dabagh said. “They have committed a deliberate crime and should be punished under the law.”

Blackwater, which guards the US Embassy and employs about 1,000 people in Iraq, insists that its guards were responding to an ambush when the clashes erupted during a mission to escort American diplomats back to the green zone.

The incident has shone a spotlight on the shady world of private security companies, prompting many Iraqi politicians to call for tighter rules governing such foreign outfits and for Blackwater to be booted out of the country.

The Iraqi investigation said that 17 people were killed and 27 injured — higher numbers than were given previously. It also found that seven cars were burn or damaged.

Dr Dabagh said that the Cabinet would weigh the findings of the investigation with those of the joint commission and “and subsequently adopt the legal procedures to hold this company accountable”.

Mirembe Nantongo, the US Embassy spokeswoman in Baghdad, said that the US-Iraqi commission had debated the Iraqi report into Blackwater when it met for the first time Yesterday.

Chaired by the Iraqi Defence Minister, Abdel Qader Mohammed Jassim, and the US Embassy Deputy Chief of Mission, Patricia Butenis, the panel exchanged opinions about the shootings and agreed on a need to establish a direct mechanism for sharing information and to review several issues related to US security operations.

“There are lots of issues now to be discussed in depth . . . let the commission do its work and see what it comes up with,” Ms Nantongo said.

As well as the Iraqi inquiry, the FBI has sent a team to Baghdad to look into Blackwater, which is accused of involvement in almost 200 shootings in Iraq.

An envoy to Condoleezza Rice, the US Secretary of State, is also reviewing how her department conducts its protective security detail operations in Iraq. Robert Gates, the Defence Secretary, has launched a similar review for his department.

In fresh violence today, a car bomb killed two people near Poland's embassy in Baghdad, five days after the Polish ambassador was wounded in an attack.

A diplomat, however, said that there were no casualties or major damage at the mission in the latest bombing.

General Edward Pietrzyk, the Polish Ambassador and also the European Union's envoy to Iraq, was injured in a triple bomb attack on his diplomatic convoy in Baghdad last Wednesday in which one Polish secret service officer and an Iraqi passer-by were killed.

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