I suggest that the incident is a little more significant than we may have realized. It calls into question the entire issue of whether we're in Iraq to liberate the Iraqis or for our own self interests, which is one of the key "hearts and mind" issues and winning hearts and minds is the ultimate objective.

How sovereign is a country that can't even enforce it's own laws?

Quote Originally Posted by New York Times
The deaths struck a nerve with Iraqis, who say that private security firms are often quick to shoot and are rarely held responsible for their actions. A law issued by the American authority in Iraq before the United States handed over sovereignty to Iraqis, Order No. 17, gives the companies immunity from Iraqi law. A security expert based in Baghdad said Monday night that the order, issued in 2004, had never been overturned. Like others, he spoke on the condition of anonymity because the matter remains under official inquiry.

Senior officials, including Prime Minister Nuri Kamal al-Maliki, expressed outrage.

“This is a big crime that we can’t stay silent in front of,” said Jawad al-Bolani, the interior minister, in remarks on Al Arabiya television. “Anyone who wants to have good relations with Iraq has to respect Iraqis. We apply the law and are committed to it.”


When push comes to shove, will we ignore the Iraqi government to protect ourselves? It looks like we might.

Quote Originally Posted by New York Time
Because Blackwater guards are so central to the American operation here, having provided protection for numerous American ambassadors, it was not clear on Monday whether the United States would agree to end a relationship with a trusted protector so quickly. Ambassador Ryan C. Crocker praised private security companies in a speech on Sept. 11, referring to Blackwater by name.

“This incident will be the true test of diplomacy between the State Department and the government of Iraq,” said one American official in Baghdad.
Which demonstrates the point I've made several times when discussing "marketing" in other threads. People judge you by your actions, more so than by your words, no matter how good your spin is.

The entire NY times Article is here