A federal judge cited repeated government missteps in dismissing all charges against five Blackwater Worldwide security guards accused of killing unarmed Iraqi civilians in a case that inflamed anti-American sentiment abroad.

U.S. District Judge Ricardo Urbina dismissed the case against the guards accused of the shooting in a crowded Baghdad intersection in 2007.

The shooting in busy Nisoor Square left 17 Iraqis dead. The Iraqi government wanted the guards to face trial in Iraq and officials there said they would closely watch how the U.S. judicial system handled the case.

Judge Urbina said the prosecutors ignored the advice of senior Justice Department officials and built their case on sworn statements that had been given under a promise of immunity. Judge Urbina said that violated the guards’ constitutional rights. He dismissed the government’s explanations as “contradictory, unbelievable and lacking in credibility.”

“We’re obviously disappointed by the decision,” said Justice Department spokesman Dean Boyd. “We’re still in the process of reviewing the opinion and considering our options.”

Prosecutors can appeal the ruling.

Ali al-Dabagh, the Iraqi government spokesman, said in a statement on Friday that the government was dismayed by the court’s dismissal of the case.

“The Iraqi Government regrets the decision,” he said. “Investigations conducted by specialised Iraqi authorities confirmed unequivocally that the guards of Blackwater committed the crime of murder and broke the rules by using arms without the existence of any threat obliging them to use force.”

“The Iraqi Government will follow up its procedures strictly and firmly to pursue the criminals of the above named company and to preserve the rights of the Iraqi citizens who were victims or the families who suffered losses from this crime.”

Dr. Haitham Ahmed, whose wife and son were killed in the shooting, said the decision casts doubt on the integrity of the entire U.S. justice system.

“If a judge ... dismissed the trial, that is ridiculous and the whole thing has been but a farce,” said Dr. Ahmed. “The rights of our victims and the rights of the innocent people should not be wasted.”

Dozens of Iraqis, including the estates of some of the victims allegedly killed by Blackwater employees, filed a separate lawsuit last year alleging that Blackwater employees engaged in indiscriminate killings and beatings. The civil case is still before a Virginia court.

Blackwater contractors had been hired to guard U.S. diplomats in Iraq. The guards said militants ambushed them in a traffic circle. Prosecutors said the men unleashed an unprovoked attack on civilians using machine guns and grenades.

The shooting led to the unravelling of the North Carolina-based company, which since has replaced its management and changed its name to Xe Services.

The five guards are former Marines Donald Ball, Dustin Heard and Evan Liberty; Nick Slatten, a former Army sergeant; and Paul Slough, an Army veteran.

Defence attorneys said the guards were thrilled by the ruling after more than two years of scrutiny.

The five guards had been charged with manslaughter and weapons violations. The charges carried mandatory 30-year prison terms.

Judge Urbina’s ruling does not resolve whether the shooting was proper. Rather, the 90-page opinion underscores some of the conflicting evidence in the case. Some Blackwater guards told prosecutors they were concerned about the shooting and offered to cooperate. Others said the convoy had been attacked. By the time the FBI began investigating, Nisoor Square had been picked clean of bullets that might have proven whether there had been a firefight or a massacre.

The top U.S. commander in Iraq, Gen. Raymond Odierno, declined to comment on the specifics of the case, but said, “I do worry about it, because clearly there were innocent people killed in that attack ... it is heart-wrenching.”

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