BAGHDAD (Reuters) - Iraqi forces detained five U.S. security contractors in connection with the killing of a fellow American contractor last month in Baghdad’s Green Zone, an Iraqi government spokesman said on Sunday.

Major General Abdul-Karim Khalaf, the Interior Ministry spokesman, said the five men were being held at an Iraqi police station in the capital’s heavily-fortified central district while a joint Iraqi-U.S. committee investigated.

The detainees could become the first Americans to face local justice since a bilateral security pact came into force at the start of this year making U.S. contractors subject to Iraqi law.

“There are no formal charges against them so far, but they were detained because of the murder of the contractor last month,” Khalaf told Reuters.

Citing an unnamed Iraqi official involved in the investigation, CNN said the men had been detained on Friday in a pre-dawn raid on their company’s office in the Green Zone.

The murdered contractor, James Kitterman, was a 60-year-old Texan who owned a construction company operating in Iraq.

Kitterman was found bound, blindfolded and stabbed to death on May 22 in the heavily-fortified district.

Citing unnamed sources, CNN said the five men knew the victim and that the U.S. Federal Bureau of Investigation (FBI) was involved in the probe into his death.

Heavily-armed and highly-paid Western contractors are a common sight in Iraq, especially in the Green Zone, also known as the International Zone. Many provide security for the U.S. military in Iraq while others protect private firms.

A U.S. Embassy spokesman in the Iraqi capital confirmed five U.S. citizens were taken into custody by Iraqi authorities.

“Embassy consular officials have visited the five and ensured they are being afforded their rights under Iraqi law. The men appeared well,” the U.S. spokesman told Reuters.

The security agreement between Washington and Baghdad sets terms for the withdrawal of U.S. troops from Iraq and establishes guidelines for their activities while they remain.

It also allows U.S. troops to be tried in Iraqi courts -- but only in cases of serious, premeditated crimes committed while soldiers were off-base and off-duty.

Private contractors, previously immune to prosecution in Iraq, are now wholly bound by Iraqi laws.

Under the pact, U.S. combat troops were scheduled to withdraw from Iraqi towns and cities by the end of this month, while all U.S. troops must leave the country by December 31, 2011.