Updated

The Iraqi government on Tuesday approved draft legislation lifting immunity for foreign private security companies, sending the measure to parliament, a spokesman said.

The question of immunity has been one of the most serious disputes between the U.S. and the Iraqi government since a Sept. 16 shooting involving Blackwater USA guards that left 17 Iraqi civilians dead.

The government's decision followed reports that the State Department has promised Blackwater bodyguards immunity from prosecution in its investigation of last month's shooting.

State Department officials declined to confirm or deny that immunity had been granted. Blackwater spokeswoman Anne Tyrrell has declined comment about the U.S. investigation.

Iraqi government spokesman Ali al-Dabbagh said the draft law approved Tuesday would overturn an immunity order known as Decree 17 that was issued by L. Paul Bremer, who ran the American occupation government until June 2004.

"It will be sent to the parliament within the coming days to be ratified," he told The Associated Press.

Al-Dabbagh did not single out Blackwater but said: "According to this law, all security companies will subjected to the Iraqi criminal law and must obey all the country's legal regulations such as: registration, customs, visas, etcetera."

U.S. Embassy spokeswoman Mirembe Nantongo said she had not seen the measure and had no immediate comment. The embassy has said it was waiting for the results of investigations.

Prime Minister Nouri al-Maliki has promised to push through the measure amid growing public anger over the Blackwater shootings in Baghdad and a series of other Iraqi civilian deaths allegedly at the hands of foreign contractors.

Three senior U.S. law enforcement officials told The Associated Press that all the Blackwater bodyguards involved — both in the vehicle convoy and in at least two helicopters above — were given the legal protection as investigators from the Bureau of Diplomatic Security sought to find out what happened. The bureau is an arm of the State Department.

The law enforcement and State Department officials agreed to speak only if they could remain anonymous because of the sensitivity of the inquiry into the incident.

The Moyock, N.C.-based company, which is the largest private security firm protecting U.S. diplomats in Iraq, has said its Sept. 16 convoy was under attack before it opened fire in west Baghdad's Nisoor Square, killing 17 Iraqis. A follow-up investigation by the Iraqi government, however, concluded that Blackwater's men were unprovoked. No witnesses have been found to contradict that finding.

An initial incident report by U.S. Central Command, which oversees military operations in Iraq, also indicated "no enemy activity involved" in the Sept. 16 incident. The report says Blackwater guards were traveling against the flow of traffic through a traffic circle when they "engaged five civilian vehicles with small arms fire" at a distance of 50 yards.

The FBI took over the case early this month, officials said, after prosecutors in the Justice Department's criminal division realized it could not bring charges against Blackwater guards based on their statements to the Diplomatic Security investigators.

Blackwater's contract with the State Department expires in May and there are questions whether it will remain as the primary contractor for diplomatic bodyguards.

Congress also is expected to investigate the shootings, but a House watchdog committee said it has so far held off, based on a Justice Department request that lawmakers wait until the FBI concludes its inquiry.