Enlarge By Hadi Mizban, AP A private security company's armored vehicle rolls through Tahrir square in central Baghdad on Dec. 13. Iraq will have more jurisdiction over security contractors next year. BAGHDAD  When the calendar flips to 2009 on Thursday, Iraq's government will gain control over the Green Zone and its own airspace and some jurisdiction over security contractors under the terms of a deal that will fundamentally change how the United States operates here. The changes, outlined in a landmark security agreement the Bush administration signed in November, are part of the broadest transfer of responsibilities to Iraqi hands since 2004, when the government regained sovereignty from the U.S.-led Coalition Provisional Authority (CPA). The most visible changes will take place in the Green Zone, the fortified section of Baghdad that has been the U.S. headquarters since the invasion in 2003. Last week, Gen. Ray Odierno, the top U.S. military commander in Iraq, called it the Iraqi Security Zone. U.S. forces will continue to issue ID cards and act as advisers for months to come, but except for the sprawling U.S. Embassy complex along the Tigris River, the Iraqis "will be in charge" Jan. 1, Odierno said. The changes represent "a palpable shift in power," said Daniel Serwer, former executive director of the Iraq Study Group, a panel appointed by Congress in 2006 to assess the situation here. "If the Americans had the bigger office on Dec. 31, they'll have the smaller one on Jan. 1." The U.S.-Iraqi Status of Forces Agreement, or SOFA, mandates the withdrawal of all U.S. troops from Iraq by 2011 and establishes guidelines for their actions until then. It also sets terms for non-military personnel operating in Iraq, including private security contractors who guard diplomats and other civilians working here. Until now, all American contractors have avoided Iraq's jurisdiction under a rule issued by the CPA in 2004 that said contractors were "immune from Iraqi legal process." That arrangement has been deeply unpopular with the Iraqi public since September 2007, when guards from the Blackwater company opened fire and killed 14 Iraqis in Baghdad, according to the U.S. Justice Department. Five of the guards were indicted on manslaughter charges this month. The SOFA explicitly ends that immunity for contractors working for the military or Defense Department. The agreement says nothing about contractors such as Blackwater that work for civilian agencies such as the State Department — and it is unclear how much their operations would be affected, if at all. Police powers Adnan al-Asadi, a senior deputy in Iraq's Ministry of Interior, said Iraqi police will be able to search the offices and vehicles of private security contractors, confiscate illegal weapons and expel companies operating without a license. "Now it is our turn to be responsible for the safety of our country," said al-Asadi, whose huge ministry employs 650,000 police and other security personnel. A State Department inspector general's report released Dec. 18 said it was "still unresolved" what the SOFA will mean to Blackwater and two other private security companies that protect diplomats here. The mere prospect of Americans in Iraqi jails could result in changes. A report this month by the U.S. Institute of Peace, a Washington think tank, urged the incoming Obama administration to develop contingency plans in case Iraq exercises its new powers to prosecute U.S. contractors or troops in Iraqi courts. It said the Iraqi government "may quickly assert its authority" to prosecute U.S. citizens, "especially given the current high pitch of nationalist sentiment in Iraq." The State Department report said that if Blackwater and other contractors are no longer granted immunity, many "personal security specialists would leave, and those remaining would ask for and receive premium compensation" at much greater cost to taxpayers. Doug Brooks, president of the International Peace Operations Association, a trade group in Washington, called the SOFA "terrible." He said contractors will "have no protection" from arrest and detention. The Blackwater issue In April, the State Department renewed its contract with Blackwater, which is the largest security contractor in Iraq with 1,000 employees. The State Department said it would await the results of an ongoing FBI investigation into the shooting in 2007 before possibly reconsidering. Iraq canceled Blackwater's license after the shooting but had no legal authority to enforce a ban. Al-Asadi said the company may have to leave Iraq because the Ministry of Interior has denied its application for a new license. Al-Asadi said Blackwater is among 70 private security companies that have been "working under the cover of the American forces" without a license. "If they don't have a license, they should leave," he said. "Only those with licenses can work here." Blackwater spokeswoman Anne Tyrell declined to comment. In an e-mail, she wrote, "Blackwater works in Iraq at the behest and under the direction of the United States government." "We are not envisioning changing our contracting practice" with Blackwater, U.S. Embassy spokeswoman Susan Ziadeh said Sunday. She refused to answer "hypothetical" questions about who would protect diplomats if Blackwater was expelled by the Iraqi government. "We're not there yet," she said. Though it remains unsettled who will accompany diplomatic convoys, al-Asadi said he was confident about what kinds of weapons contractors will, and will not, tote in the new year. As of Thursday, most foreign contractors will not be allowed to possess machine guns that fire .50-caliber bullets or larger. If they're caught with such heavy weapons, Iraqi security forces will take them away. "An AK-47 is enough to protect them," al-Asadi said. "They don't have the right to have more effective weapons than we have." Contributing: Ali A. Nabhan Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more