BAGHDAD — U.S. and Iraqi officials are negotiating Baghdad’s demand that security company Blackwater USA be expelled from the country within six months, and American diplomats appear to be working on how to fill the security gap if the company is phased out.

The talks about Blackwater’s future in Iraq stem from recommendations in an Iraqi government report on the Sept. 16 incident when, Iraqi officials determined, Blackwater guards opened fire without provocation in Baghdad’s Nisoor Square and killed 17 Iraqi citizens.

The Iraqi investigators issued five recommendations to the government of Prime Minister Nouri al-Maliki, which has since sent them to the U.S. Embassy as demands for action.

Point No. 2 in the report says:

“The Iraqi government should demand that the United States stops using the services of Blackwater in Iraq within six months and replace it with a new, more disciplined organization that would be answerable to Iraqi laws.”

Sami al-Askari, a top aide to al-Maliki, said that point in the Iraqi list of demands was nonnegotiable.

“I believe the government has been clear. There have been attacks on the lives of Iraqi citizens on the part of that company (Blackwater). It must be expelled. The government has given six months for its expulsion and it’s left to the U.S. Embassy to determine with Blackwater when to terminate the contract. The American administration must find another company,” he told the AP.

In talks between American diplomats and the al-Maliki government, al-Askari said the U.S. side was not “insisting on Blackwater staying.” He was the only Iraqi or American official who would allow use of his name, others said information they gave was too sensitive.

Al-Askari said the Americans have been told that another demand, that Blackwater make a payment of $8 million in compensation for each victim, was negotiable.

“With the investigations and reviews ongoing, it would be clearly premature to say that any definitive determinations have been made about the future of the Blackwater contract,” a senior U.S. official in Baghdad said.

Another diplomat, speaking privately, said he did not see how the State Department could insist on keeping Blackwater in place given how “tainted” it had become after numerous incidents, especially the slayings of Sept. 16.

In an interview to be broadcast Monday on PBS, Charlie Rose asked Blackwater chief Erik Prince about the issue.

“We’ll do what we’re told and, you know, make the transition as smooth as possible,” Prince said.

American officials said DynCorp, which already has security contracts with the State Department to guard officials working outside Baghdad, appeared poised to take over the Blackwater role.