BAGHDAD (Reuters):

Iraq will review the status of all security companies after this week's "flagrant assault" by contractors from the U.S. firm Blackwater in which 11 people were shot dead, the government said yesterday.

Government spokesman Ali al-Dabbagh said the cabinet backed an Interior Ministry decision to "halt the licence" of Blackwater, which provides security for the U.S. Embassy, and launch an immediate investigation into the shooting.

Shi'ite cleric Moqtada al-Sadr, adding his voice to Iraqi anger over the incident, urged the government to "cancel this company's work, and the rest of the criminal and intelligence companies" that employ tens of thousands of people across Iraq.

In fresh violence, four car bombs in Baghdad killed 17 people and wounded 50, police said.

"Cabinet affirmed ... the need to review the situation of foreign and local security companies working in Iraq in accordance with Iraqi laws," Dabbagh said.

"This came after the flagrant assault conducted by members of the American security company Black-water against Iraqi citizens," he said in a statement after the cabinet meeting.