The U.S. and Iraqi governments are setting up a joint commission to examine the controversial role of private security companies operating in Iraq. The action follows a lethal incident Sunday involving the American security contractor Blackwater USA. VOA's David Gollust reports from the State Department.

Officials here say the joint commission will not investigate the Sunday shooting incident, which is already the subject of parallel U.S. and Iraqi inquiries.

But they say the panel will use any findings of those probes to try to develop new policies to govern the military contractors, who have been frequently accused of acting with impunity in their roles in Iraq which include protecting U.S. diplomats.

At least 11 Iraqis were killed Sunday in the incident involving Blackwater contractors protecting a U.S. diplomatic convoy moving through a Baghdad neighborhood outside the fortified international zone.

Iraqi officials say the Blackwater guards fired indiscriminately after mortar rounds fell near their vehicles. The North Carolina-based U.S. company says its employees acted lawfully and appropriately to a hostile attack.

The case has strained U.S.-Iraqi relations and focused new attention on vague and conflicting guidelines governing the contractors and their legal status in Iraq.

State Department Deputy Spokesman Tom Casey told reporters the joint commission will attempt to deal with the issues, some of them not new, raised by Sunday's incident.

"It demonstrates that we and the Iraqis are committed to working together both to address the activities or the response to the specific incident that's occurred, as well as to look at the broader issues of the operation of personal security details in Iraq," said Casey. "So this is I think something that, again, demonstrates that we are and will work together on this issue, and we want to arrive at some common joint recommendations and solutions that each government will then be able to implement."

Iraqi officials said on Tuesday that Blackwater's operations in Iraq had been suspended. The U.S. embassy in Iraq announced shortly afterwards that it has temporarily banned diplomatic convoy movements outside the international zone, which are largely protected by Blackwater personnel.

White House Press Secretary Dana Perino Wednesday reiterated U.S. expressions of regret for the loss of innocent life on Sunday, while also stressing that U.S. officials operating in the dangerous environment in Iraq need the protection provided by Blackwater and other firms.

In another development, the State Department announced that veteran U.S. diplomat James Foley has been named by Secretary of State Condoleezza Rice to be senior coordinator for Iraqi refugee issues.

Part of the mandate of Foley, a former ambassador to Haiti, will be to clear away bureaucratic snarls involving the State Department and Department of Homeland Security that have slowed U.S. admissions of Iraqi refugees.

The Bush administration promised earlier this year to process 7,000 refugee admissions by September 30 but officials say paperwork on only about one third of those cases will be finished by then.

The administration has come under criticism in Congress and elsewhere for not doing more for Iraqis who had fled the country or been displaced, especially those who have worked for the U.S. government and military as translators or in other support roles.

Earlier this week, the Washington Post newspaper published details of a leaked State Department cable in which U.S. ambassador to Baghdad Ryan Crocker complained about major bottlenecks in refugee processing due to lengthy security reviews.