McCormack said the State Department would not cancel its nearly $900 million in contracts with Blackwater, involved in 56 shootings in 2007. He said Blackwater has been vital for protection of U.S. diplomats in the Baghdad area.

"Our diplomats trust these contractors, in the north, in the south, as well as in the Baghdad area, with their lives," McCormack said. "So it is not a matter of trust. One might say this is a good way to be able to protect all involved, in the case that there is an incident, that you do have at the very least some objective baseline account of what went on."

"We are putting in place more robust assets to make sure that the management reporting and accountability function works as best as it possibly can," State Department spokesman Sean McCormack said on Oct. 5.

Officials said the new regulations were instituted in wake of an Iraqi and U.S. initial investigation into the Baghdad shootout. They said the department has ordered its own security personnel to accompany every Blackwater convoy in Iraq.

The State Department was also directed to monitor other Blackwater activities. Officials said this would include recording Blackwater radio transmissions, installing video cameras in the company's security vehicles and archiving electronic tracking and movement data.

"The secretary wants to ensure that we have the best possible management controls and the best possible management feedback loop that we can have," McCormack said. "In case there is an incident, we will have an improved capability to ensure that we have all the possible information we can collect to determine exactly what happened. And, we want to make sure that we have full connectivity, up and down the chain, with the military operating in the area."

A report ordered by Defense Secretary Robert Gates was said to have complained of Blackwater and other private military contractors in Iraq. The report accused the contractors of failing to coordinate with the U.S. military in Iraq.

Critics said the State Department's latest measures were wasteful and meant to retain Blackwater as a supplier. In Congress, legislation has been introduced to end the use of private military contractors in Iraq and replace them with government employees.

"This just shows how much they want to keep Blackwater on the payroll," Rep. Jan Schakowsky, an Illinois Democrat said. "They're going to have to send dozens and dozens of agents to baby-sit these Blackwater units."