A US federal judge has dismissed all charges against five guards from US security firm Blackwater over the killing of 17 Iraqis in 2007.

The five, contracted to defend US diplomatic personnel, were accused of opening fire on a crowd in Baghdad.

District Judge Ricardo Urbina said the US justice department had used evidence prosecutors were not supposed to have.

The five had all pleaded not guilty to manslaughter. A sixth guard admitted killing at least one Iraqi.

The killings, which took place in Nisoor Square, Baghdad, strained Iraq's relationship with the US and raised questions about US contractors operating in war zones.