BAGHDAD, Iraq &

The security company Blackwater USA was approved Friday to resume escorting U.S. officials in Baghdad, just days after the fatal shooting of 11 Iraqis galvanized the Iraqi government over the company's conduct and the immunity its employees enjoy from Iraqi law.




The decision by the U.S. embassy came despite Iraqi Prime Minister Nouri al-Maliki's insistence that the State Department should sack the company and his government's demand that Blackwater and like-minded firms be stripped of their immunity granted by U.S. administrator L. Paul Bremer III in 2004.




"This morning, we resumed taking requests for movements. The idea was to have limited movements outside the Green Zone. Obviously this was a step taken in consultation with the Iraqi authorities," said embassy spokeswoman Mirembe Nantongo. A senior Iraqi lawmaker, Sami Askari, said officials would be informed of Blackwater's whereabouts, but Nantongo disputed that the embassy would be providing them precise details of their missions.




"This time they will be restricted; they will be required to inform the Iraqi government about their movements until the end of the investigation," said Askari, an adviser to al-Maliki.




The embassy announced Tuesday it had forbidden U.S. officials to travel outside the Green Zone, the fortress-like enclave of the Iraqi government and diplomatic community, citing the increased threat of attacks following the incident with Blackwater.




The U.S and Iraqi governments have been in consultation since Sunday when a Blackwater security detail killed 11 people in Nisoor circle in western Baghdad's Mansour district.




A preliminary Iraqi government investigation, carried out by the interior ministry, found that the armed guards fired unprovoked on Iraqi civilians. In turn, Blackwater and the State Deparment have said that their security detail had been hit by bullets.




Nonetheless, nearly a week into the crisis, which has marked an unprecedented stand by the Iraqi government over the conduct of private security companies , Iraqi officials have retreated after declaring they would take away security contractors' immunity. Instead, the prime minister agreed Wednesday that a joint Iraqi-U.S. commission will review the status of security contactors and also receive the results of an Iraqi and U.S. military investigation.




The investigation into what happened Sunday has been complicated by the involvement of the embassy's own diplomatic security agents, who work with and supervise Blackwater. The embassy's security department has been accused by some diplomats of having failed to challenge Blackwater in the past over questionable episodes.




Peter Singer, a Brookings Institution expert on security contractors, was skeptical about whether the joint commission would change the rules and hold Blackwater accountable for any misconduct in Iraq.




"Based on the past track record I don't have a lot of evidence to base that hope on, but maybe this (event) changes the game," Singer said.




Singer criticized the embassy's insistence on its own investigation report, parallel to the Iraqi government's probe. "It is utter silliness. All it does is guarantee we will have two versions of the story, and further the disconnect and sense of double standards," he said.




Contractors such as Blackwater had damaged the U.S.-led effort to woo Iraqis away from Sunni and Shiite extremists, Singer said




The animosity was evident at Friday prayers in the Shiite shrine city of Najaf, where a senior cleric railed against Blackwater and warned Washington officials that apologies, like those of U.S. Secretary of State Condoleezza Rice, were not enough.




"It is important that these companies be regulated by the law, and therefore an apology from Rice is not enough. Thousands of Iraqi children, women and elderly have been killed &

as the Americans put it &

by accident," said cleric Sadruddin Qubanchi.




Civilian contractors were also doubtful that any justice would be done. "We think its hard to give Blackwater the benefit of the doubt," one contractor said on condition of anonymity. "Even among their peer group, we are also tired of having guns pulled on us and being generally abused."




Against the backdrop of the Blackwater controversy, military officials said Friday there had been an increase in the areas of Baghdad under the control of U.S. forces, but acknowledged that Iraqi troops were taking the lead in less than a 10th of the city's neighborhoods.




"The level of violence is way, way down," said Maj. Gen. Joseph Fil, the American division commander in charge of Baghdad, in a teleconference with Pentagon reporters. "And perhaps more significantly, the ability of the Iraqi security forces to control their own neighborhoods ... is growing."




The pace of the turnover has been a subject of debate within the military. Some skeptics of the strategy have said the U.S. is moving too slowly in handing responsibility to the Iraqis. But military officials in Baghdad caution that moving faster could jeopardize security gains.




Fils said more neighborhoods could be turned over but that Iraqi forces were not yet adequate to handle the responsibility.




"The fundamental question: Are the Iraqi security forces sufficient to truly protect the city? I do not believe they are," Fil said .




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Times staff writers Raheem Salman, Said Rifai and Saif Hameed, and special correspondent Saad Fakhrildeen in Najaf contributed to this report.