Six guards have been under investigation since a convoy of heavily armed Blackwater contractors opened fire in a crowded Baghdad intersection on September 16, 2007.
Witnesses say the shooting was unprovoked, but Blackwater, hired by the State Department to guard U.S. diplomats, says its guards were ambushed by insurgents while responding to a car bombing.
Young children were among the victims and the shooting strained relations
between the U.S. and Iraq.
Following the shooting, Blackwater became the subject of congressional hearings in Washington and insurgent propaganda videos in Iraq.
The law is unclear on whether contractors can be charged in the U.S., or anywhere, for crimes committed overseas.
The indictment sends the message that the Justice Department believes contractors do not operate with legal impunity in war zones.
The Justice Department has ordered five of the six guards to surrender to the FBI, but details of where or when were being worked out on Friday, according to those people close to the case. The five men,, are Marine and Army veterans.
One of the six guards has been negotiating to reduce the charges against him in return for cooperation.
Iraqis said Saturday they look forward to the trial.
"I think it is a move in the right direction to make the security company employees realize that they are no longer above the law and they should stop behaving like cowboys on the streets of Baghdad," said Mohammed Latif, 52, a retired police officer.
He said he hoped the indictments were not just "an act of propaganda."
Qais Rahim, a 44-year-old engineer, said it was important to hold those responsible "accountable for their vicious crime" to prevent other private security contractors from mistreating innocent civilians.
Rasim Hussein, a 55-year-old retired army officer under Saddam Hussein, said that other private security companies should be held accountable for wrongdoing in Iraq.
"This indictment is not enough because there are still dozens of criminal security company employees on the loose in Iraq," he said.
An Iraqi government spokesman, Ali al-Dabbagh, said Baghdad welcomed any attempt to "hold the criminals accountable for their crime."
The Iraqi government, he said, has retained a law firm to pursue compensation for the families of the victims.
Bombs And Shootings Kill 6 In Iraq
Bombers and gunmen targeted Iraqi police recruits and U.S.-allied Sunni guards in a series of attacks Saturday that killed at least six people and wounded dozens more, officials said.
The deadliest attack was an ambush on a checkpoint manned by members of an armed Sunni group that has joined forces with the United States against al Qaeda in Iraq.
Gunmen opened fire on the checkpoint in the village of Ousoud, northeast of the Diyala provincial capital of Baqouba, killing three of the Sunni guards and wounding four others, according to police at the regional security headquarters.
A bomb also exploded inside a cafe frequented by so-called Sons of Iraq, as the Sunni groups are known, in Baqouba, wounding eight of them and 11 civilians, police and hospital officials said.
In Baghdad, a bomb attached to a police truck exploded near a popular vegetable market in a southern neighborhood, killing a Sunni tribal leader who was a Sons of Iraq member and his driver, Iraqi police and hospital officials said.
The Sunni revolt in Iraq has been one of the key factors in a sharp decline in violence over the past year, and members of the group have frequently been targeted as insurgents try to derail the security gains.
A wave of violence also has targeted official Iraqi security forces following the approval of a security pact with the United States that allows American forces to remain in Iraq for three more years.
A suicide bomber targeted police recruits near a checkpoint in the northern oil town of Kirkuk, killing at least one and wounding 14 other people, police Brig. Gen. Burhan Tayeb Taha said.
The explosion occurred during a recruiting drive at the academy, another police official, Brig. Gen. Sarhat Qadir, said, adding that the aim was to recruit 1,000 people but only 150 were present when the explosion happened.
Mahdi Shakir, 23, said he had just arrived at the academy with his paperwork when the explosion occurred.
"My file and documents fell on the ground among the other files of other recruits and were stained with blood," said Shakir, who was being treated at a nearby hospital.
Ali Mahmoud, 24, another recruit, said the blast was so powerful that it threw him to the ground.
"The explosion caused panic and chaos. Most of the recruits were very young men and they were shivering in fear," he said.
Iraqi Police Find 27 Bodies In Mass Graves
Iraqi officials say 27 bodies have been found in two separate mass graves.
A senior police official says 18 have been unearthed south of Baghdad near the former al Qaeda in Iraq stronghold of Arab Jabour.
The official says the victims include two women and a boy and are believed to have been hanged more than two years ago.
Police and hospital officials say the remains of nine other people have been discovered near the northern city of Tal Afar.
They say a detained Sunni insurgent confessed to helping murder nine Shiite civilians about two years ago and revealed the grave's location.
The officials announced Saturday's grisly discoveries on condition of anonymity because they weren't authorized to release the information.
By Associated Press Writers Matt Apuzzo and Lara Jakes Jordan