According to CNN.com, Blackwater USA has been thrown out of Iraq [1]:

Iraq's Interior Ministry has revoked the license of Blackwater USA [2], an American security firm whose contractors are blamed for a Sunday gunbattle in Baghdad that left eight civilians dead.

Sunday's firefight took place near Nusoor Square, an area that straddles the predominantly Sunni Arab neighborhoods of Mansour and Yarmouk.

In addition to the fatalities, 14 people were wounded, most of them civilians, the official said.

The incident started when a U.S. State Department convoy Blackwater contractors were apparently protecting came under attack.

As the AP reports [3]:

Tens of thousands of foreign private security contractors work in Iraq some with automatic weapons, body armor, helicopters and bulletproof vehicles to provide protection for Westerners and dignitaries in Iraq as the country has plummeted toward anarchy and civil war.

These contractors are deeply unpopular among Iraqi civilians because of their alleged militant posturing and frenzied driving throughout the cities of Iraq.

Yet even if the Blackwater contractors did indeed commit a crime, it is questionable they will be held accountable.

Due to a deal secured by the United States with the Iraqi government, private security contractors cannot be prosecuted for crimes they commit while in Iraq. And because they are not techniquely  "soldiers," they do not fall underneath the Uniform Code of Military Justice [4].

Interior Ministry spokesman Abdul-Karim Khalaf denies private security contractors are exempt from Iraqi law while the Interior Ministry vowed to prosecute any contractor found to have used excessive force Sunday, says the AP.

Blackwater USA first came to prominence when four of its contractors were murdered and their bodies desecrated [5] in Fallujah, Iraq, in 2004, which led to a U.S. Marine attack to retake the city that April.

For more on Blackwater USA and the rise of private security contracting, see "Warriors for Hire [6]" from The Weekly Standard.