The US state department and the Pentagon have agreed on procedures to improve the oversight of private security contractors operating in Iraq.
It is the latest effort to tighten the controls over private security firms following an incident in September in which 17 Iraqis were killed.
That incident, involving Blackwater security guards, is still being investigated by the FBI.
The state department has already tightened its rules for contractors.
It included the installation of cameras inside private security firm vehicles.
But the US military has also been arguing for more control over the activities of private security guards.
This latest agreement between the Pentagon and the state department gives US commanders a greater role in co-ordinating the movements of contractors working for American diplomats as well as the military.
Under the agreement, there are also clear standards for investigating incidents and holding private security guards to account should they break any rules.
The deal still gives private contractors the right to use deadly force to defend themselves and others when they have reason to believe that they face an imminent risk of death or serious harm.