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U.S. will allow Blackwater's Iraq contract to expire, official says

The U.S. State Department will not renew Blackwater Worldwide's contract to protect American diplomats in Iraq when it expires in May, a senior U.S. official said Friday.

The U.S. State Department will not renew Blackwater Worldwide's contract to protect American diplomats in Iraq when it expires in May, a senior U.S. official said Friday.

The contract will expire because of the Iraqi government's decision to deny Blackwater a licence to operate, the official told the Associated Press. The Iraqis informed the State Department last week of the decision, which was made amid lingering outrage over a September 2007 shooting in Baghdad's Nisoor Square that left 17 Iraqi civilians dead.

The official said that renewing the contract was "basically a moot point because they were not going to be allowed to operate in Iraq anyway." The official spoke on condition of anonymity because the decision has yet to be announced.

The State Department said it was still considering how to protect U.S. diplomats after the Blackwater contract expires.

Officials have said one possibility would be to use guards from one or a both of the other U.S.-based security contractors that work for the State Department in Iraq, DynCorp and Triple Canopy. Both have Iraqi operating licences.

Touchstone for brutality charges

Blackwater executives say the company could leave Iraq within 72 hours of being told to do so, but they said such a move would cause more harm to the diplomats it protects than to the company itself.

In a Thursday interview with the Associated Press at the firm's North Carolina headquarters, Blackwater founder Erik Prince said he had not received any indication from the State Department that the company would be ordered to evacuate in the wake of the licence denial.

The Nisoor Square shooting strained relations between Washington and Baghdad and fuelled the anti-U.S. insurgency in Iraq, where many Iraqis saw the bloodshed as a demonstration of American brutality and arrogance. Five former Blackwater guards have pleaded not guilty in the United States to federal charges that include 14 counts of manslaughter and 20 counts of attempted manslaughter.

Blackwater maintains the guards opened fire after coming under attack, an argument supported by transcripts of Blackwater radio logs obtained by the AP. They describe a hectic eight minutes in which the guards repeatedly reported incoming gunfire from insurgents and Iraqi police.

Blackwater has been operating in Iraq without a formal licence since 2006. The State Department extended Blackwater's contract for a year last spring, despite widespread calls for the company to be expelled from Iraq because of the shootings.