Security contractor shot dead in Baghdad

By Max Blenkin, AAP Defence Correspondent
Julie Bishop says an Australian security contractor has been killed at the embassy in Baghdad.

An Australian security contractor has been shot dead while guarding the embassy in Baghdad in circumstances that remain unclear.

Foreign Minister Julie Bishop says the death of the unnamed man, 34, was not related to the broader security situation in Baghdad, which is marked by regular attacks and bombings by Islamic State terrorists.

Media reports suggest the man was a former special forces soldier employed by Unity Resources Group, a Dubai-based Australian security company contracted to guard the embassy.

Another employee of URG, a former Australian commando, is reportedly being questioned about the incident.

Ms Bishop refuses to comment, saying a thorough investigation is under way.

"Until such time as that investigation is concluded I won't be making any further comment," she said on Friday.

Australia's embassy in Baghdad is a new purpose-built structure located inside the city's more secure "green zone".

It replaced a suburban house that Australian diplomats first used in the time of late dictator Saddam Hussein.

Australian diplomats and security personnel relocated inside the green zone in 2005 following a series of attacks as Iraq's civil war escalated.

The new embassy building was initially guarded by ADF troops but with the withdrawal of all Australian forces from Iraq, URG was hired to provide security.

Many of URG's personnel are former Australian special forces soldiers.

Media reports earlier this year suggested there were problems with the level of security provided by URG because the government had reduced their contract from $100 million over five years to $51 million over three years.

Ms Bishop said the security of the embassy and personnel was a top priority, and there had been no funding cuts.

"We put out a competitive tender for security services and the company that won the tender was not the lowest tenderer. We have received guarantees and assurance about security," she said.

URG has been asked for comment.