Blackwater faced bedlam, U.S. Embassy finds

WASHINGTON - The initial U.S. Embassy report on a Sept. 16 shooting incident in Baghdad involving Blackwater USA, a private security firm, depicts an afternoon of mayhem that included a car bomb, a shootout in a crowded traffic circle and an armed standoff between Blackwater guards and Iraqi security forces before the U.S. military intervened.

The two-page report, described by a State Department official as a "first blush" account from the scene, raises new questions about what transpired in the intersection. According to the report, the events that led to the shooting involved three Blackwater units.

One of them was ambushed near the traffic circle and returned fire before fleeing the scene, the report said. Another unit that went to the intersection was then surrounded by Iraqis and had to be extricated by the U.S. military, it added.

The report, by the State Department's Bureau of Diplomatic Security, details the events as described by Blackwater guards -- details that are now at the center of an intense debate in Iraq and in Congress over the larger role of private security firms in Iraq. Tens of thousands of armed, private guards operate in Iraq, protecting everything from U.S. and Iraqi officials to supply convoys.

The shooting incident is being scrutinized in at least three separate investigations.