A private security guard has shot dead a taxi driver in Iraq in the latest in a string of what Iraqis believe are unprovoked killings by US contractors hired to protect Americans.

A spokesman for US-based DynCorp International said one of its teams opened fire at a vehicle in Baghdad after it approached a convoy in a "threatening manner".

"Our team had reported that they believed no one was injured. So although there were conflicting reports, we are trying to determine if the incidents are one and the same," Gregory Lagana, DynCorp's senior vice-president for communications said.

Not standard procedure

Lagana said the standard procedure in such cases was to fire a single shot into the engine block to disable the vehicle.

"There may have been more than one shot taken, but I don't think it was several," he said.

DynCorp is among three firms - along with Blackwater and Triple Canopy - under contract to protect American diplomats and other officials in Iraq.

Iraqi officials said the shooting took place at 12:45pm across from a children's playground in Baghdad's Atafiyah neighbourhood, when a taxi driver pulled up close to a convoy of seven US vehicles driving through the area.

Guards signalled for the taxi to pull away, and then one of them opened fire on the car, they said.

The driver was shot in the chest and head, but was still alive when shopkeepers and police rushed to help him, witnesses and police said.

He died in a police car on the way to the hospital, said Ahmed Adel, a barber who watched the events unfold outside his shop.

'No threat'

"The convoy stopped at an intersection where there was a little traffic jam... Suddenly, guards from the last SUV opened fire on the taxi while it was totally motionless and no threat whatsoever to the convoy," Adel said.

"We rushed to the car and helped the police pull him out."

He added that the taxi's gearshift was in neutral when they pulled the driver out, suggesting that his car was not moving when he was shot.

Police searched the taxi and found no weapons or other signs of threatening activity, police and the interior ministry said.

The convoy did not stop for the investigation, an officer said on condition of anonymity.

Another witness said that after the shooting, a guard stepped out of the vehicle from which the shots were fired and walked over to the taxi to see what had happened, but then turned back quickly.

"They simply did not care about the shot taxi driver, and the convoy sped away," the man said, refusing to give his name.

The US embassy said DynCorp reported a "security incident" on Saturday involving one of its teams and that the embassy's regional security office was "following this closely".

Above the law

It was the latest shooting by private security contractors perceived by many Iraqis as operating above the law.

The US government has offered some guards limited immunity under deals that have slowed prosecution of other shooting cases and angered Iraqis.

In September, another shooting left 17 Iraqis dead and prompted the Iraqi government to call for the expulsion of the firm involved, Blackwater.

The company has said its convoy was under attack before it opened fire, but initial investigations by Iraqi and US authorities have concluded otherwise.

Iraq's interior ministry said it had opened an investigation into Saturday's shooting which came just two days before the arrival of two senior US officials to investigate the role of private security companies in Iraq.

Last month, Washington ordered new measures to improve government oversight of bodyguards, including tighter rules of engagement and a board to investigate any future killings, but so far the moves have not seemed to have had much visible effect on the way the guards operate.

Gregory Starr, the acting assistant US secretary of state for diplomatic security, and P Jackson Bell, deputy undersecretary of defence for logistics and materiel readiness, arrived in Baghdad on Monday to help implement the new rules, the US embassy said.

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