US and Iraq say they have set up a joint investigative commission, following a deadly shootout in Baghdad involving a US security firm.
Blackwater's operations in Iraq are now suspended
Eleven Iraqi civilians died when guards from the Blackwater company opened fire in a busy Baghdad square on Sunday.
Blackwater says its guards acted in self-defence, but this has been disputed by Iraqi eyewitnesses.
Iraqi Prime Minister Nouri Maliki has described the shooting as a "criminal act" and vowed not to tolerate it.
Blackwater, which has a contract to provide security to all US state department employees in Iraq, has been ordered by Baghdad to stop its activities in the country, pending the outcome of the investigation.
In a separate development, the US has suspended all road journeys by its diplomats in Iraq outside Baghdad's heavily fortified Green Zone.
The investigating commission will be co-chaired by US and Iraqi officials, state department spokesman Tom Casey said on Wednesday.
BLACKWATER USA FACTS
Founded in 1997 by a former US Navy Seal
Headquarters in North Carolina
One of at least 28 private security companies in Iraq
Employs 744 US citizens, 231 third-country nationals, and 12 Iraqis to protect US state department in Iraq
Provided protection for former CPA head Paul Bremer
Four employees killed by mob in Falluja in March 2004
"The commission's goal is to make joint policy recommendations, including specific suggestions for improving US and Iraqi procedures regarding government-affiliated personal security details," he said.
Mr Casey said the commission "is not conducting a specific investigation into this incident", although the shootout would be "a significant portion" the inquiry.
The spokesman added that the commission would also receive the findings of a US review of the incident.
'In cold blood'
Blackwater said in a statement earlier this week that its employees "acted lawfully and appropriately in response to a hostile attack" against a state department convoy in Baghdad's al-Nisur Square
The Green Zone is the administrative centre of Baghdad
It said the guards were forced to return "defensive fire".
But several Iraqi eyewitnesses have said that no-one shot at the convoy, adding that the firm's guards fired randomly at civilians.
Blackwater's account of the incident was also disputed by Mr Maliki, who said on Wednesday that he would not tolerate the "killing of our citizens in cold blood".
He said that the shootout was "the seventh of its kind" involving Blackwater.