Ali al-Dabbagh, a government spokesman, said a high-level inquiry found no evidence that the personnel from the security firm had come under fire during the incident.
Stating that Blackwater could also face legal action, al-Dabbagh said on Sunday: "What they committed is considered a crime of deliberate killing and they must be held accountable according to the law."
Blackwater had earlier said its guards reacted lawfully to an attack on one of its convoys.
Al-Dabbagh said a probe ordered by Nuri al-Maliki, the Iraqi prime minister, found "no evidence that the Blackwater convoy came under any direct or indirect fire, or that it was even hit by stones".
Iraqis say civilians were killed without provocation by Blackwater guards on September 16.
On Sunday, a committee made up of US and Iraqi officials met for the first time to review the operations of foreign security firms in
A
'Private armies'
Blackwater employs 1,000 people in
Many Iraqis resent their presence, seeing them as private armies which have shot and killed civilians with impunity.
Condoleezza Rice, the
The state department also plans to send diplomatic security agents to accompany each convoy protected by Blackwater guards.
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Al-Jazeera