Iraq has expressed anger with a US federal court ruling that threw out all charges against five Blackwater Worldwide security guards accused of gunning down Iraqi civilians in 2007.

The ruling was 'unjust and unacceptable' Iraqi government spokesman Ali al-Dabbagh said in a statement, adding that Iraq had started to take steps to sue the private security company, now known as Xe Services.

A federal judge threw out the charges against the guards accused of killing 14 Iraqi civilians in 2007, saying the US government had recklessly violated the defendants' constitutional rights.

Dabbagh called for the ruling to be appealed against. He gave no details on how or where Iraq would take legal action.

The Baghdad shooting strained US-Iraqi relations and became a symbol for many Iraqis of foreign disregard for local life.

'The Iraqi government regrets and is disappointed by the US court's decision,' Dabbagh said by telephone.

After the 2003 invasion, private guards protecting US personnel enjoyed immunity from prosecution in Iraqi courts, but that ended with a bilateral pact that took effect in 2009.

The five guards were charged in a US federal court a year ago with 14 counts of manslaughter, 20 counts of attempt to commit manslaughter and one weapons violation count.

General Ray Odierno, commander of US troops in Iraq, echoed the Iraqi government's displeasure.

'Of course we're upset when we believe that people might have caused a crime and they are not held accountable,' he told reporters in Baghdad, adding the dismissal might create a backlash against other security firms operating in Iraq.

The shooting happened as a heavily armed Blackwater convoy escorted US officials in downtown Baghdad on Sept. 16, 2007.

The guards, US military veterans, said they heard a nearby explosion and gunfire, and began shooting across a crowded intersection in self-defence.

One Iraqi at the scene, whose young son was killed in the incident, said the guards indiscriminately rained gunfire on cars at the intersection near the convoy.

Mohammed Usama, the son of a man killed in the incident, said he was surprised at the US judge's verdict.

A sixth Blackwater guard had earlier pleaded guilty to charges of voluntary manslaughter and attempt to commit manslaughter, and agreed to cooperate with prosecutors.

The Justice Department said it was disappointed by the judge's action.

'We're in the process of reviewing the opinion and considering our options,' Dean Boyd, a department spokesman, said in response to a question about whether the government would appeal. – Reuters