The U.S. State Department may phase out or limit the use of private security firms, including Blackwater USA, in Iraq following a top-to-bottom review of security practices in the country, according to media reports Thursday.
That might mean Blackwater could lose its contract in line with the demand by the Iraqi government.
The reports said such steps would be difficult because the United States is heavily reliant on Blackwater and other contractors for protection.
But according to two senior officials, there are among options being studied as part of the comprehensive review ordered by U.S. Secretary of State Condoleezza Rice after a Sept. 16 shooting incident in which Blackwater guards are accused of opening fire without provocation and killing 17 Iraqi civilians.
The shooting has stirred anger from the Iraqi government, which is demanding removal of Blackwater in six months and 8 million U.S. dollars in compensation to each of the families of the victims. It also has focused attention on the vague rules governing private guards.
The officials cautioned that no decisions have been made on what the review panel will recommend. But they said Rice is eager for changes and has already accepted and implemented initial steps urged in a preliminary report last week.
The measures included improving government oversight of Blackwater by having federal agents accompany convoys and installing video cameras in their vehicles.