WASHINGTON, Jan. 30 (Xinhua) -- The United States will not renew Blackwater Worldwide's contract to protect American diplomats in Iraq when it expires in May, local media reported on Friday.

    "The Blackwater contract for Iraq will not be renewed ... because they were not going to be allowed to operate in Iraq anyway," an unidentified senior U.S. official said.

    The State Department was considering options on how to protect its diplomats in the wake of the Iraqi denial of Blackwater's operating license. One possibility would be to replace Blackwater with one or a combination of guards from two other U.S.-based security contractors that work for the State Department in Iraq --DynCorp and Triple Canopy. Both have licenses to operate in Iraq, according to the report.

    Blackwater, a private security contractor hired to protect State Department personnel in Iraq, has been operating in Iraq without a formal license since 2006.

    Blackwater guards were accused by the Iraqi government for using excessive force in Baghdad streets, killing many people. The deadliest incident was in Sept. 16, 2007, when the company's guards opened fire at the crowded Nusour Square in western Baghdad, killing 17 civilians.