BAGHDAD — The Baghdad contract for the security firm once known as Blackwater Worldwide ended Thursday, the U.S. Embassy said, although the company will temporarily continue operations elsewhere in Iraq.

The confirmation of the end of the company's operations in Baghdad was a major step toward ending the presence of the firm that has become a flashpoint for Iraqi anger after a deadly 2007 shooting by its contractors.

However, State Department officials have said the company will remain in some areas of southern Iraq into the summer and that its aviation service, Presidential Airways, will provide air security for U.S. diplomatic convoys into September.

U.S. Embassy spokeswoman Susan Ziadeh said the company's task order for Baghdad ended Thursday and a new security provider Triple Canopy was taking over.

Ziadeh wouldn't comment on specifics, saying only that the company has other task orders that "will come to an end once they expire, which will be soon."

The Iraqi government denied the U.S. company, which has changed its name to Xe, a license in January. But it has continued operations protecting American diplomats, raising questions over the strength of Iraq's sovereignty as it remains heavily dependent on the U.S. for security.

Iraqis have long complained about the heavy-handed behavior of security contractors for Blackwater and other companies. That anger peaked in September 2007, when Blackwater guards opened fire in Baghdad's Nisoor Square, killing 17 Iraqi civilians.

Five Blackwater guards face manslaughter and weapons charges in the shooting, which prosecutors say was an unprovoked attack on civilians. The shooting strained relations between Baghdad and Washington and led Iraqi leaders to order Blackwater out of the country.

"What Blackwater did doesn't mean that all private security men are bad, but people's image of them was ruined because of what they did at al Nisoor Square," said Ahmed Naji, 23, of Baghdad. "People fear them a lot when they move in streets."

But the American Embassy, which is located in Baghdad's heavily fortified Green Zone, and other U.S. government employees have relied heavily on Blackwater for protection, and diplomats said privately that more time was needed to find other options.

Xe spokeswoman Anne Tyrrell defended the company's performance in Iraq.

"We are honored to have provided this service for five years and are proud of our success. No one under our protection has been killed or even seriously injured," she said.

Iraq's Interior Minister Jawad al-Bolani said the government recognized that the U.S. administration needed some transition time in shutting down the company's operations.