Mohammed Hafiz, 37, holds pictures of his lost son Ali Mohammed, 10,  as he describes how he died after 16 Sept. attack by Blackwater USA contractors

Iraq's government is asking American security firm Blackwater USA to pay $136 million to the families of Iraqis killed in a recent shooting.

The demand is included in a report of an Iraqi government investigation into the September 16 incident in a western Baghdad square. It charges that Blackwater security guards deliberately killed 17 people in the shooting.

The Associated Press says the report also includes a demand that the U.S. government cut its ties with Blackwater within six months. The Blackwater guards were escorting U.S. State Department personnel at the time of the shooting.

Blackwater has said its guards responded lawfully to an attack on a U.S. diplomatic convoy they were protecting.

The shooting is still under investigation by the U.S. military, the FBI and a joint committee of U.S. and Iraqi officials.

U.S. Secretary of State Condoleezza Rice ordered tighter controls on Blackwater last week, including a requirement for U.S. government agents to accompany private security guards working in Iraq.

Some information for this report was provided by AP and Reuters.