Iraqi authorities said five U.S. contractors detained last week in connection with the killing of an American businessman have been cleared of his death.

Iraqi officials said Thursday they released three of the American contractors for lack of evidence, but ordered them to post bail due to the ongoing nature of the case.  They say the other two Americans remain in Iraqi custody for suspected drug offenses.

The U.S. Embassy in Baghdad said it only could confirm that one of the contractors was released on bail.

Iraqi authorities detained the five Americans as part of an investigation into the killing of American construction company owner James Kitterman. The 60-year-old was found stabbed to death in his car in Baghdad's heavily-protected Green Zone on May 22.

If any of the contractors are charged and brought before an Iraqi court, they would be the first Americans to face Iraqi justice under a U.S.-Iraqi security pact that took effect in January.

The five Americans work for U.S.-based security company Corporate Training Unlimited. The contractors were acquainted with Kitterman.

In other developments, a bomb went off in eastern Baghdad Thursday near a U.S. military patrol. Iraqi officials said the blast killed an Iraqi citizen and wounded four other people. The U.S. military reported two people wounded, including an Iraqi citizen and a U.S. soldier.

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