The US private security company formerly known as Blackwater has agreed to settle a wrongful death lawsuit with the families of four contractors killed in a gruesome 2004 ambush that was a defining moment of the Iraq war for the American public.

The families reached a confidential settlement with Academi, as Blackwater is now known, agreeing to the dismissal of their case before the US Court of Appeals for the 4th Circuit based in Richmond, Virginia.

An administrator for the estates of Stephen Helvenston, Mike Teague, Jerko Zovko and Wesley Batalona sued Blackwater in 2005 after the security contractors were killed by Iraqi insurgents while escorting a supply convoy in Fallujah.

They were beaten, burned and executed. Two of the charred bodies were strung from a bridge over the Euphrates River. Images of the events disturbed Americans at one of the low points for the United States during the Iraqi occupation.

Blackwater, which changed its name to Xe Services and then to Academi, came to symbolize the US policy of hiring private contractors to perform work previously handled by the military.

The lawsuit accused the company of sending the contractors into a high-risk environment without armored vehicles, automatic weapons and the required number of personnel.

A federal judge in North Carolina dismissed the lawsuit in January 2011 after court-ordered arbitration efforts failed. The administrator of the dead contractors' estates appealed to the 4th Circuit to revive the lawsuit.

Details of the settlement were not immediately available.

John Procter, a spokesman for the company, declined to comment, under the terms of the agreement. Lawyers for the administrator did not respond to requests for comment.-Reuters