The State Department moved quickly Monday to tamp down anger and possible repercussions after the alleged killing of eight Iraqi civilians in an incident involving a private security firm hired to protect U.S. diplomats in Iraq.

Secretary of State Condoleezza Rice telephoned Iraqi Prime Minister Nouri al-Maliki to express regret at the loss of life and promise that the results of an internal investigation into Sunday's incident would be shared with the government in Baghdad.

"She told the Prime Minister that we were investigating this incident and wanted to gain a full understanding of what happened," said deputy State Department spokesman Tom Casey. "She reiterated that the United States does everything it can to avoid such loss of life, in contrast to the enemies of the Iraqi people who deliberately target civilians."

Rice and al-Maliki "agreed on the importance of working closely together in the time ahead on a transparent investigation," Casey added.

The 15-minute call came after Iraq's Interior Ministry said it had revoked the license of the firm, Blackwater USA, to work in the country, a move that could severely curtail the ability of U.S. diplomats to operate outside the heavily fortified "Green Zone."

State Department spokesman Sean McCormack said Washington had not been informed of the cancellation of the license after the latest in a series of incidents in which private contractors working for the United States have been accused of misdeeds.

There were conflicting accounts of the incident, in which, according to the U.S. Embassy in Baghdad, a diplomatic convoy was attacked in Baghdad, causing security guards to open fire.

While Iraqis blamed Blackwater for the civilian deaths, the company said it acted appropriately "in response to a hostile attack" by armed insurgents.

McCormack cautioned against jumping to conclusions, saying: "There was a loss of life here. There was a firefight. We believe some innocent life was lost. Nobody wants to see that. But I can't tell you who was responsible for that."

McCormack had no information about any Iraqi laws Blackwater or its employees might be subject to, the chain of command its employees answer to, or details of the company's contract with the State Department.

He said the probe is being conducted by the State Department's Bureau of Diplomatic Security with assistance from the U.S.-led coalition in Iraq.

Blackwater, based in Moyock, N.C., is one of three private security firms employed by the department to protect its personnel in Iraq. The two others, both of which are headquartered in the Washington, D.C., suburbs, are Dyncorp, based in Falls Church, Va., and Triple Canopy, based in Herndon, Va.

The moves by the Bush administration appeared unlikely to forestall a congressional inquiry into not just Sunday's events but the government's increasing reliance on the use of contractors in Iraq.

"The controversy over Blackwater is an unfortunate demonstration of the perils of excessive reliance on private security contractors," said Rep. Henry Waxman, D-Calif., chairman of the House Oversight Committee. He said his committee would hold hearings to determine "what has happened and the extent of the damage to U.S. security interests."

Rep. Jan Schakowsky, D-Ill., who has long questioned Blackwater's role in Iraq, said the shootings will likely hurt the U.S. mission to rebuild Iraq and said Congress should consider regulating the industry.

"Under what law are these individuals operating, and do the Iraqis have the authority to prosecute people for the crimes they're accused of committing? It's a very murky area," said Schakowsky. "It's still not really clear whether they are eligible for prosecution from the Iraqi government.

"These are the kinds of things that are very provocative that do impact our mission. It's unclear what exactly they're allowed to do. It's a very dangerous and explosive situation that's created by these armed private security contractors -- and particularly Blackwater."

Sen. John Warner, R-Va., the senior Republican on the Senate Armed Services Committee, struck a less contentious tone, noting the Iraqi government relies heavily on contractors to provide services.

"Having visited now 10 times in Iraq, most recently just two or three weeks ago, I know full well the dependence of that nation upon contractors -- contractors who are trying to refurbish their seriously deteriorated oil production facilities, their power lines, their fresh water," Warner said.

"Any number of activities today in Iraq are performed by rather a courageous band of civilians who have gone over there and assumed the same extraordinary risks that men and women in the armed forces are experiencing every day," he told reporters on the sidelines of a conference in Williamsburg, Va.