The Iraqi interior ministry announced that it would not renew the operating license of controversial U.S. security firm Blackwater, now that its contract has expired. Blackwater aroused the fury of many Iraqis after a shooting incident in which 17 civilians were killed in 2007, when Blackwater agents escorting a U.S. diplomatic convoy opened fire in Baghdad.

Iraqi Interior Ministry Spokesman General Abdul Karim Khalaf indicated that the Iraqi government had made the decision because of "improper conduct and excessive use of force." 

"Putting it succinctly, the [Iraqi] government has decided that it would not issue a new operating license [for Blackwater], and that is the way things stand, right now, in a nutshell," he said.

A new security pact between Iraq and the United States, which was ratified by the Iraqi parliament in November, and went into effect on January 1, gives the Iraqi government the power to decide which foreign security firms can operate on its soil.

Blackwater provides security for the U.S. Embassy and Embassy spokesperson Susan Ziadeh indicated officials there are working to assure that the decision would not disrupt operations.

"We have been informed that Blackwater's private security company operating license will not be granted. We do not have any specifics about the dates, however, we are working with the government of Iraq and our contractors to address the implications of this decision," she said.

General Khalaf told the French Press Agency that the September 2007 shooting incident in a busy Baghdad intersection, in which Blackwater guards opened fire while protecting a U.S. diplomatic convoy was the direct cause of the decision not to renew Blackwater's operating contract.

The Iraqi government officially investigated the shooting, which enraged ordinary Iraqis and made headlines in the press for weeks.

Five former Blackwater contractors, involved in the shooting, are due to go on trial in the United States in the coming days.

Iraqi Prime Minister Nouri al-Maliki said during a speech, while campaigning for provincial elections set to take place Saturday, that Iraq is "working to achieve national unity, in order to make the new security pact with the United States work, so that foreign forces are no longer needed on its soil."

He did not directly mention the decision not to renew Blackwater's contract, but analysts say the decision would likely appeal to both Shi'ite and Sunni voters.