Iraq’s government revoked the license of military contractor Blackwater USA—which protects the U.S. embassy—after a Baghdad shootout that killed eight people. The the Blackwater guards—who are among 20,000 private security contractors in Iraq—were providing security for a U.S. diplomatic convoy when the shooting started.

“Well, this should be interesting,” said Kevin Drum on This puts the Bush administration and the Iraqi government alike in a very tight spot. “The Maliki government is already hanging by a thread, and forcing them to back down on this after they've already gone public could deal them a death blow.”

“It's hard to tell whether this is a legitimate response to overly aggressive contractors,” said Mark Hemingway in National Review Online’s The Corner blog, or simply an attempt by the Iraqi government to “weaken the U.S. presence in the country.” Either way, there’s a lot at stake. The U.S. counts on private contractors to help diplomats and materials circulate in Iraq as safely as possible, and free up our overstretched military for other duties. “If the Iraqi government starts going after security contractors it could significantly hamper U.S. operations.”

Not to mention the fact that Ambassador Ryan Crocker depends on the Blackwater guys to keep him alive, said Spencer Ackerman on TalkingPointsMemo’s Muckraker. If Iraq’s Interior Ministry presses this issue, it’s in for a fight. For one thing, Blackwater didn’t register to operate in Iraq—the now-defunct Coalition Provisional Authority issued a decree in 2004 “immunizing” security contractors and “putting them under the jurisdiction of U.S. authorities.”

That makes booting Blackwater about the only form of redress Iraqis have, said Alex Koppelman and Mark Benjamin in Under the 2004 decree, they can't take Blackwater employees to court for killing civilians. And "should any attempt be made to prosecute Blackwater in the United States, meanwhile, it's not clear what law, if any, applies."

Don’t worry, said Wonkette, Blackwater “will never, ever be kicked out of Iraq.” The U.S. depends too heavily on Blackwater muscle. But you can hardly blame the Iraqis for making some noise. Blackwater employees reputedly have a nasty habit of “shooting people for crimes like looking suspicious and driving too close to Blackwater trucks.”