Three American contractors detained during an investigation into the slaying of another American have been ordered released, but two others remain in custody on drug charges, the Iraqi government said Thursday.

Government spokesman Ali al-Dabbagh, correcting an earlier statement, said only one of the men had been released as of late Thursday because of bureaucratic delays involving the other two. He said earlier that all three had been freed.

Corporate Training Unlimited, a Fayetteville, North Carolina-based security company, confirmed that its owner, Donald Feeney Jr., had been freed but four other American employees, including Feeney's son, were still detained.

The case has been seen as the first test of a provision in a U.S.-Iraqi security pact that lifted the immunity U.S. contractors had enjoyed for most of the 6-year-old war. But it has been surrounded by confusion as American and Iraqi officials have given varying information about the circumstances involved.

U.S.-backed Iraqi forces detained the contractors June 3 in connection with an investigation into the stabbing death of contractor Jim Kitterman of Houston.

Kitterman, a 60-year-old construction company owner, was found dead in his car on May 22 in Baghdad's protected Green Zone. He had been blindfolded, bound and stabbed.

U.S. and Iraqi officials have said the five detained Americans were not accused in Kitterman's death but were detained in a raid that was part of the investigation into the killing.

The U.S. Embassy said FBI agents were present during a search of the men's quarters at the request of Iraqi authorities who are handling the investigation.

Al-Dabbagh said Wednesday that an investigative judge had ordered all five freed due to insufficient evidence. But he said Thursday that two of the suspects remained in custody on drug charges.

Feeney, 55, who founded the company in 1986, was detained with his son, Donald Feeney III, 31, and three other employees, according to CTU spokeswoman Sarah Smith.

Smith has said the CTU contractors knew Kitterman as "simply comrades living in the Green Zone."

CTU trains corporate officials on how to avoid terrorists while they are overseas. The company, which has operated in Iraq since 2003, also has gained attention for rescuing American children taken to foreign countries in custody disputes.