U.S. to tighten rules for Iraq contractors

By Andrew Gray and Randall Mikkelsen

WASHINGTON (Reuters) - The Pentagon and U.S. State Department have agreed to tighten rules governing private security contractors in Iraq, giving a greater oversight role to the U.S. military, officials said on Tuesday.

The proposed changes emerged from a review triggered by a shooting incident in Baghdad last month in which security guards from U.S. security firm Blackwater, working for the State Department, are accused of having killed 17 Iraqis.

Efforts to prosecute guards involved in the incident could be complicated by a grant of limited immunity offered by State Department investigators, U.S. officials also said on Tuesday.

Secretary of State Condoleezza Rice and Defence Secretary Robert Gates met on Tuesday to discuss a working group's recommendations to give the U.S. military "considerably more involvement in contractor operations," the Pentagon said.

"All this stuff needs to be tightened up," Pentagon press secretary Geoff Morrell told a news briefing.

However, the agreement appeared to fall short of a deal putting contractors under the command of the military, as Pentagon officials had suggested.

State Department spokesman Sean McCormack said from a practical standpoint, it was decided not to put contractors under military command.

"Once they did an analysis of it, they decided this was not something they wanted to take on," said McCormack.