One week after the gunbattle that killed 10 civilians and enraged Iraq's government, police and interior ministry officials were still gathering witness accounts and hunting video footage perhaps taken by amateurs on mobile phones.

Blackwater insists the US convoy it was escorting came under attack by insurgents before its guards opened fire but the Iraqi government was incensed by the incident and said it would revoke the security company's licence.

Traffic officer Ali Khalaf, who was on duty on Sunday last week in Al-Yarmukh, in the mainly Sunni Mansour area of west Baghdad, told AFP he had witnessed the entire incident.

"The American convoy arrived... and as usual I stopped the traffic to allow them to pass," Khalaf said.

As they often do, guards from the US firm -- the largest private security operators in Iraq -- hurled water bottles at cars to stop traffic as they drove through.

"Then without reason, they opened fire. Four shots, in the air, aiming just above the cars," Khalaf said.

"But one of the bullets struck a man in his car. I went to his aid but he was already dead, his body was slumped on the dashboard.

"His wife was then killed before my eyes by a bullet that hit her in the head."

Khalaf said he ran to take shelter inside his little hut as the gunfire continued.

The car with the dead couple "continued to move, with its doors open and the bodies inside -- like a phantom vehicle."

"The Americans fired at everything that moved, with a machine gun and even with a grenade launcher. There was panic. Everyone tried to flee. Vehicles tried to make U-turns to escape."

According to Khalaf, people then left their cars and tried to flee for cover, some being struck down as they ran. A car was hit by two grenades and burst into fire, engulfing its occupants in flames.

"There were dead bodies and wounded people everywhere, the road was full of blood. A bus was also hit and several of its occupants were wounded," said the traffic officer.

Two small black helicopters that always accompany Blackwater on security missions swooped down and sprayed the scene with machine gun fire, Khalaf added.

On Wednesday, the Iraqi and US governments announced they had set up a joint commission to investigate the shootings as well as to examine the broader question of rules governing foreign security companies operating in Iraq.

Despite opposition from Iraqi Prime Minister Nuri al-Maliki, Blackwater, which escorts US embassy personnel, was back on the streets of Baghdad on Friday after being grounded for four days.

According to a senior policeman involved in the investigations, other witnesses are equally adamant that Blackwater opened fire without provocation.

"The Americans say that the convoy first came under small arms fire. That is totally false," the officer told AFP, asking not to be named because he is not entitled to speak to the media.

"None of the witnesses we have interviewed speak of an attack," he said.

"There is at least one video, shot by police using a digital camera just moments after the shooting, which shows the victims," said the police officer. "This video is in our hands and we are examining it."

He did not rule out the possible existence of other videos taken at the moment of the shooting, including with mobile phones, given the number of people present at the time.

"The Blackwater guards opened fire on motorists without reason, they were never a target of a single shot or any attack," the officer said.

Twenty-three-year-old Kyle Schott of Renton had been charged with first-degree rape, but the charge was reduced to second-degree.

Whitman County Superior Court documents say Schott and another man broke into the Kappa Alpha Theta sorority September 13th and attacked a woman as she slept.

Prosecutors say Schott watched while Christopher Reid performed sex acts on the woman. The two fled when she awoke. They are also accused of breaking into two other WSU sororities the same night.

Reid pleaded not guilty Wednesday to burglary and rape charges. The 25-year-old Los Angeles man performs in porno films under the name Jack Venice.

According to Securities and Exchange Commission filings, the complaint alleges that the defendants violated federal securities laws by making material misleading statements and omissions, providing inaccurate financial information, and failing to make proper disclosures.

The initial class action suit was filed in 2005. The company denies liability.

The memorandum of understanding is subject to certain contingencies that require court approval, including a provision that prevents its former independent auditors Grant Thornton LLP from prosecuting any claims against the company related to the litigation.

"Our prosecutors analyzed the case, they spoke with the victim, and she thought it was best to resolve this case short of trial," District Attorney David Roger said.

Neither the woman nor her lawyer could be reached for comment.

Chaanine, 53, remained in jail on $1 million bail pending sentencing Nov. 1. The battery charge carries a maximum prison term of six to 15 years, but Chaanine could be eligible for probation, officials said.

He remains suspended by the Diocese of Las Vegas. The district attorney said that as a convicted felon, Chaanine would "probably never be a priest again."

Deputy Public Defender Scott Coffee said Chaanine took responsibility for the attack, but "vehemently denies there was any sexual assault."

The woman sang at the church and was hired by Chaanine in October as the parish events coordinator. She accused Chaanine of hitting her in the head with a wine bottle on Jan. 26, stomping on her hand, groping her and choking her until she began praying. She said he suddenly stopped and fled.

Chaanine was arrested almost a week later near Phoenix. The woman was treated for a broken hand and a gash on the head, authorities said.

Both sides characterized Chaanine's relationship with his accuser as more than priest and parishioner, but they did not say the two were romantically involved.

Bishop Joseph Pepe, the head of the Las Vegas Diocese, issued the a statement Thursday characterizing the church community as saddened and saying he prayed for "unity and strength" in the congregation.

Signed by "God," the response filed Wednesday argues the defendant is immune from some earthly laws and the court lacks jurisdiction over God.

Blaming the Almighty for human oppression and suffering misses an important point, it says.

"I created man and woman with free will and next to the promise of immortal life, free will is my greatest gift to you," according to the response, as read by Friend.

St. Michael the Archangel is listed as a witness, Friend said.

Another response - also signed God - says the Lord disputes Chambers' allegations.

That filing lists a phone number for a Corpus Christi law office. A message left for that office was not immediately returned Thursday.

Chambers could not be reached Thursday to comment on the response. He said in his five-page lawsuit that God has made terroristic threats against him and his constituents, inspired fear and caused "widespread death, destruction and terrorization of millions upon millions of the Earth's inhabitants."

He's seeking a permanent injunction against God.

The self-proclaimed agnostic who often criticizes Christians said his filing was triggered by a federal lawsuit against a judge, filed by a woman who was barred from saying "rape," "victim" and other words in court.

Chambers said the woman's lawsuit is inappropriate because the Nebraska Supreme Court has already considered the case and federal courts follow the decisions of state supreme courts on state matters.

Chambers said his lawsuit is serious but also makes a point: Anybody can sue anybody.