A report by the British American Security Information Council said that private military companies in Iraq have employed Algerian and Israeli nationals to protect vital Iraqi facilities and help the U.S.-led coalition.

The report said the Middle East nationals have been attracted by salaries of more than $130,000 a year.

"The lure of higher salaries is causing an exodus of U.S. and British special forces to PMCs just as these military forces are being asked to play an increasing role in combating terrorism and helping to conduct nation-building operations worldwide," the report said. "Competition over elite troops from private companies is so intense that the U.S. and British military commanders are formulating new pay, benefits, and educational incentives to try to retain them."

The report said PMCs have done "reasonably well" in fulfilling their contracts in Iraq, Middle East Newsline reported. The private security personnel were said to have demonstrated professionalism and appeared more in tune with local culture than U.S. military forces.

"PMCs are employing personnel from several countries, not just the United States," the report, entitled "The Case for a Pragmatic Assessment of Private Military Companies in Iraq," said. "Contractors from Britain, Nepal, Chile, Ukraine, Israel, South Africa and Fiji are doing a wide variety of tasks in Iraq but the common link is helping, in one way or another, to provide security.

"Security firms are also believed to be employing veterans of anti-insurgency conflicts in Colombia and Algeria and former soldiers who fought in the Russian government's war in Chechnya," the report added.

The report, released in October 2004, said those hired by private military contractors in Iraq include members of elite military and security units. Basic Research said about 6,000 foreigners were believed to be working as private security personnel in Iraq.

The largest private military contractor in Iraq was identified as the British firm Global Risk Strategies, with up to 1,200 security personnel. In second place was Control Risks Group, with 750 people; followed by Blackwater USA, 600; Triple Canopy, 350; Special Operations Consulting-Security Management Group, 300; Olive, 265; and DynCorp, 175 personnel. The South African firm Erinys was said to employ 14,000 Iraqi nationals as guards.

"PMCs do not constitute the second or third largest army in Iraq," the report said. "They are not coordinated into one cohesive whole, nor do they engage in offensive operations."

The Middle East nationals who serve as security contractors in Iraq provide such services as protection for senior civilian officials, non-military site security and non-military convoy security. The report said most of the PMCs have been contracted to guard prime contractor employees.

As of September 2004, at least 58 non-Iraqi PMC personnel have been killed, the report said. This did not include Iraqi personnel working for Erinys, which reported 21 casualties.

In some cases, the need for trained foreign security personnel has clashed with the policies of several countries, the report said. PMCs were said to have hired 1,500 Indian nationals in violation of New Dehli's ban on travel to Iraq. U.S. military contractors also tried to recruit ex-soldiers from Pakistan for non-combatant security operations in Iraq.