The United States has suspended all land travel by US diplomats and other civilian officials in Iraq outside Baghdad's heavily fortified Green Zone, amid mounting public outrage over the alleged killing of civilians by the US Embassy's security provider Blackwater USA.
The move came even as the Iraqi government appeared to back down from statements on Monday that it had permanently revoked Blackwater's license and would order its 1,000 personnel to leave the country -- depriving American diplomats of security protection essential to operating in Baghdad.
"We are not intending to stop them and revoke their license indefinitely but we do need them to respect the law and the regulation here in Iraq," government spokesman Ali al-Dabbagh told CNN.
The US order confines most American officials to a nine-square kilometre area in the centre of the city, meaning they cannot visit US-funded construction sites or Iraqi officials elsewhere in the country except by helicopter.
The notice did not say when the suspension would expire.
The Iraqi Cabinet decided on Tuesday to review the status of all foreign security companies. Still, it was unclear how the dispute would play out, given the government's need to appear resolute in defending national sovereignty while maintaining its relationship with Washington at a time when US public support for the mission is faltering.
Polls show General David Petraeus' report to Congress and President Bush's nationally televised address have had little impact on Americans' distaste for the Iraq war and their desire to withdraw US troops.