BAGHDAD, Iraq (CNN) -- Iraqi Prime Minister Nuri al-Maliki blasted the U.S. State Department for renewing its contract with the Blackwater security firm, saying the company has yet to answer for what he called a "massacre" last year.
Baghdad's Nusoor Square tries to return to normalcy in September, days after a firefight involving Blackwater.
The Iraqi government was not consulted on the State Department decision, he said.
"No judicial action has been taken and no compensation has been made," al-Maliki said Sunday. "Therefore, this extension requires the approval of the Iraqi government, and the government would want to resolve the outstanding issues with this company."
According to Iraqi officials, Blackwater guards shot and killed 17 people -- including women and children -- on September 16 at Baghdad's Nusoor Square. Watch why Iraqis fear the firm »
Survivors and victims' family members allege Blackwater guards started shooting without provocation, but Blackwater said armed insurgents attacked its guards. An Iraqi probe accused the guards of committing "premeditated murder." The FBI also is investigating.
After the shootings, a joint Iraqi-U.S. committee was set up, and Iraqi officials told their American counterparts that the rules for engagement and use of force must be changed, Iraqi government spokesman Ali al-Dabbagh said.
New rules were established. Among them, a State Department security officer now accompanies any convoy manned by contractors, and each vehicle is outfitted with a security camera, the recordings from which are sent to a command center, al-Dabbagh said.
However, al-Maliki said Sunday that the renewal of Blackwater's contract isn't final "because they committed a massacre against Iraqis and until now this matter has not been resolved."
The Iraqi government wants Blackwater to fall under the jurisdiction of Iraqi law, al-Dabbagh said.
"Most importantly, the Iraqi investigation concluded that Blackwater committed a crime at Nusoor Square," al-Dabbagh said, adding that U.S. officials said they will review the State Department contract if any Blackwater personnel are convicted as a result of the FBI investigation.
Blackwater is one of three contractors -- along with Triple Canopy and DynCorp -- working under a "task order" in Iraq to provide security services.
About 25,000 private contractors protect diplomats, reconstruction workers and government officials in Iraq. Under a provision put in place early during the U.S.-led occupation of Iraq, security contractors have immunity from Iraqi prosecution.
An adviser to al-Maliki, Sadeq al-Rikabi, said the Blackwater contract would be temporary because the U.N. mandate under which the U.S. operates in Iraq will expire at year's end. It will be replaced by a bilateral agreement that's under negotiation.
"No doubt, the role of the U.S. military and contractors will be agreed on" in the new arrangement, al-Rikabi said.
The State Department signed a five-year contract with Blackwater in 2006. The deal must be reviewed every year, and is up for renewal next month. Greg Starr, acting assistant secretary of state for diplomatic security, essentially said last week that Blackwater's contract will be renewed.
Blackwater must follow Iraqi laws, Starr said, and new rules of procedure and supervision have been outlined in a memorandum of understanding. Starr said he was satisfied with the changes.
The American government, in particular Ryan Crocker, U.S. ambassador to Iraq, will examine the FBI report on its investigation before making decisions on whether to maintain the contract.
However, Starr said, "I am not going to prejudge what the FBI is going to find in its investigation. It's complex. I think the U.S. government needs protective services."
Blackwater spokeswoman Anne Tyrrell declined to comment, referring all questions to the State Department.
• A U.S. airstrike on Baghdad's al-Amin neighborhood killed nine people and wounded 35 others, an Iraqi Interior Ministry official said Monday. There was no immediate word from the U.S. military.
• Nine Iraqis were killed and 65 others wounded Monday in clashes between U.S. and Iraqi forces and Shiite militiamen in the capital's Sadr City, an Interior Ministry spokesman said. Fighting on Sunday, which also involved members of cleric Muqtada al-Sadr's Mehdi Army militia, killed 20 people and wounded 52 more in the Baghdad slum, the Interior Ministry said. Watch the aftermath of a Sadr City clash »
• Al-Sadr has called for a demonstration Wednesday in Baghdad against the U.S. presence in Iraq. The protest would coincide with the fifth anniversary of the toppling of Saddam Hussein's regime and with scheduled testimony in Washington from top U.S. officials in Iraq.
• A U.S. soldier was killed by small-arms fire Monday after a roadside bomb detonated near his vehicle during a patrol in eastern Baghdad, the U.S. military said. The U.S. death toll in the Iraq war stands at 4,021, including eight Defense Department civilians. E-mail to a friend
CNN's Ingrid Formanek, Jomana Karadsheh and Elise Labott contributed to this report.