WASHINGTON (CNN) -- Federal prosecutors are investigating allegations that employees of Blackwater -- the security firm accused of shooting dead up to 20 Iraqi civilians -- illegally smuggled weapons into Iraq, according to U.S. government sources.

Security operations by North Carolina-based Blackwater USA, which is hired by the U.S. State Department to guard U.S. staff in Iraq, were suspended this week amid concerns by Iraqi and U.S. government officials over the shootings in Baghdad last weekend. Normal operations resumed Friday, the State Department said.

One U.S. government official said the U.S. attorney's office in Raleigh, North Carolina, is in the early stages of an investigation that so far focuses on individual Blackwater employees and not the company.

Another senior U.S. government official said the State Department had been cooperating with the prosecutors in the probe.

The first public hint that an investigation was under way came earlier this week in a statement from State Department Inspector General Howard Krongard in response to allegations that he blocked fraud investigations in Afghanistan and Iraq.

"In particular, I made one of my best investigators available to help assistant U.S. attorneys in North Carolina in their investigation into alleged smuggling of weapons into Iraq by a contractor," Krongard's statement said.

Neither the U.S. attorney nor Blackwater officials had been reached for comment by Friday evening.

The flow of illegal weapons in Iraq has been a major concern in recent months.

The State Department and Pentagon launched their own investigation following complaints from the Turkish government in July that they had seized American-made weapons from the PKK, a Kurdish group considered a terrorist organization by the U.S.

CNN has received no confirmation that the probe of PKK weapons and the investigation of Blackwater employees are connected.

The shootings last weekend sparked outrage in Iraq and created new tension between the U.S. and Iraqi governments. Iraqi officials dispute the U.S. claim that the guards were responding to an attack.

U.S. Secretary of State Condoleezza Rice expressed regret about the incident in a phone call to Iraqi Prime Minister Nuri al-Maliki and promised an open and transparent probe into what happened.

The U.S. State Department announced Wednesday the creation of a joint commission to examine issues of security and safety in the aftermath of the shooting incident.
http://www.cnn.com/2007/WORLD/meast/09/22/blackwater.probe/index.html