The American firm Blackwater USA has been served notice that it faces investigations for war crimes after 17 unarmed Iraqi civilians were killed in a hail of bullets by its security guards in Baghdad.

The killings last month put the spotlight on the private security firms whose employees are immune from prosecution, unlike professional soldiers who are subject to courts martial

Ivana Vuco, the most senior UN human rights officer in Iraq, spoke yesterday about the shootings by private security guards,

"For us, it's a human rights issue," she said. "We will monitor the allegations of killings by security contractors and look into whether or not crimes against humanity and war crimes have been committed."

Iraqi authorities have accused Blackwater of the "deliberate murder" of Iraqi civilians in the shooting in a crowded city square, and are demanding millions of dollars in compensation

the latest UN human rights report

described the human rights situation in Iraq as "very grim".