Sixteen contractors with the Blackwater security firm have been subpoenaed by a federal grand jury investigating the shooting of 17 Iraqi civilians in Baghdad in September, FOX News has confirmed.

The grand jury was impaneled in Washington, D.C., several weeks ago and has been in session every day, sources told FOX News. The subpoenas were issued following the return of FBI agents to Washington from Baghdad, where they concluded their on-site investigation of the incident. Federal sources told FOX News that federal prosecutors are using the findings of the FBI investigation as the foundation for building their case against the Blackwater guards.

Blackwater officials told FOX News Monday that they are cooperating fully with the FBI and grand jury investigations. No Blackwater officials have been subpoenaed, only the firm's security contractors.

Seventeen Iraqis were killed on Sept. 16 after Blackwater guards opened fire in Baghdad’s Nisoor Square. Several members of the Blackwater security detail have been implicated for allegedly using excessive force and discharging their weapons without cause

The contractors are expected to appear before the grand jury at a hearing in December.

The grand jury is being convened, and the Blackwater employees subpoenaed, under the Military Extraterritorial Jurisdiction Act, a law that says federal contractors working for the Defense Department overseas can be held accountable for their actions under U.S. law, even though their actions were committed extra-jurisdictionally overseas.

However, Blackwater was contracted by the State Department, not the DOJ, and whether or not the U.S. has the authority to prosecute the case under MEJA remains a legal question. Sources told FOX News Monday that there may be loopholes in the law that could make MEJA applicable to State Department contractors.

Prosecutors could still determine that MEJA does not give them jurisdiction in the case, but other legal options could apply, sources told FOX News. The contractors could be prosecuted under the War Crimes Act of 1996, which provides for prosecution of “grave” violations of the Geneva Conventions, sources said.

Rep. David Price of North Carolina has proposed legislation that extends MEJA to agencies other than the Defense Department. The bill has passed the House, but not the Senate. The Bush administration opposes the legislation because it could interfere with ongoing intelligence operations using foreign contractors.

FOX News' Jennifer Griffin contributed to this report.