Blackwater security agents have played a key role in protecting U.S. diplomats and their convoys in Baghdad and elsewhere, and the State Department says the Sunday incident should be thoroughly investigated before blame is assigned.

Iraq's interior ministry says 11 people were killed in a Sunni Muslim neighborhood of Baghdad Sunday when Blackwater guards in a State Department convoy, opened fire after mortar rounds landed near the vehicles.

Iraqi officials say the guards fired randomly at civilians, though the North Carolina security company says its employees acted "lawfully and appropriately" in response to a hostile attack.

Blackwater and other companies working in Iraq had been accused before of acting with impunity in their security operations, and the interior ministry said shortly after the Sunday incident that Blackwater's license to operate in Iraq was being revoked.

However at a news briefing, State Department Spokesman Sean McCormack said the United States had not gotten formal notice of such a decision.

He said an investigation of the incident by the State Department's diplomatic security bureau is under way and that while it is apparent that civilian deaths occurred, blame should not be assigned until all the facts are known. "We want to be as open and transparent and cooperative as we possibly can with the Iraqis. I think that this is going to be a process that unfolds over a period of time. I can't tell you how long, but we're going to try to move it as quickly as possible in the interest of getting to those essential facts so that the Iraqis know it, so that we know it. And if there are any questions that arise from the Iraqi side about what's going, we're going to try to address it," he said.

McCormack said while "innocent lives" were lost in the incident, it is also important to remember that the convoy had come under attack.

He said one focus of the U.S. investigation would be whether the guards followed what he said were "defensive" rules of engagement, providing for the use of proportionate return fire in case of attack.

The spokesman also said the inquiry would examine what he termed "cross-cutting legal authorities" under which the private security firms operate.

Regulations issued in 2004 by the U.S.-led occupation authority, before the handover of sovereignty to the Baghdad government, gave the firms immunity from Iraqi law.

But Iraqi officials say those rules have been superseded and that the contractors are subject to the country's criminal statutes.

Senior government officials including Prime Minister Nouri al-Maliki have expressed outrage over the incident and the Baghdad government said Tuesday it would review the operations of all security companies working in the country.

A spokesman said Secretary of State Condoleezza Rice telephoned Mr. al- Maliki late Monday to express regret over the civilian deaths and to say that the United States does everything it can to avoid such loss of life, in contrast to insurgents who deliberately target civilians.

The spokesman said Rice and the Prime Minister agreed on the importance of working closely together in the time ahead on a transparent investigation. The two are to meet Saturday in New York at a meeting on Iraq convened by U.N. Secretary-General Ban Ki-moon.