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The Iraqi foreign minister has said the new agreement will give Iraqi courts jurisdiction over actions by U.S. contractors, The New York Times reported. In the most controversial incident, Blackwater employees guarding a U.S. State Department convoy killed 17 people, including women and children, last year in Baghdad.

The State Department refused to comment on the report, The Virginian-Pilot reported. A Blackwater spokeswoman said that the company would only comment when it knows what is in the agreement.

"We don't go into details on the negotiations", spokesman Karl Duckworth said.

Doug Brooks, president of the International Peace Operations Association, a contractors' trade group, said that only a few of the 180,000 contract employees working in Iraq are in security. He said that two-thirds are Iraqi nationals, already subject to the country's legal system, and most employees are involved in providing food service and other amenities.

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