The men's vehicles were ambushed in the flashpoint town of Falluja
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The US has condemned the killing and dismembering of four American civilian security contractors in Iraq.
The White House said it deplored the "horrific attacks" but vowed the US would not be deflected from its mission to bring democracy to Iraq.
The four were shot and burnt in their cars in Falluja, before a cheering crowd dismembered the corpses and hung two of them from a bridge.
Also on Thursday, five US soldiers were killed in a bomb attack near Falluja.
Three British soldiers were injured when their vehicle was hit by an explosive device in Basra, about 550 kilometres (340 miles) south-east of Baghdad.
The attacks marked one of the bloodiest days for coalition forces in Iraq for weeks.
Hacked to pieces
White House spokesman Scott McClellan blamed "terrorists" and supporters of ousted Iraq leader Saddam Hussein for the attacks in Falluja.
The victims' remains were hung from a bridge
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"It is offensive, it is despicable the way these individuals have been treated," he said, referring to the four men who were killed.
"... but democracy is taking root and we are making important progress. We will not turn back from that effort," he added.
US firm Blackwater Security Consulting confirmed the four were its personnel, but said in a statement the "exact identities of the victims are not known".
The company, based in Moyock, North Carolina, said it had been "providing
convoy security for food deliveries in the Falluja area".
Witnesses said the contractors were passing through Falluja in two four-wheel-drive vehicles when gunmen opened fire.
An angry crowd surrounded the cars, throwing stones and setting the vehicles ablaze.
The corpses were dragged from the wreckage and television pictures showed one burnt body being kicked and stamped on, while at least two were tied to cars and driven through the streets, witnesses said.
Adults and children hacked the bodies to pieces, before lynching two of the charred remains from a bridge spanning the Euphrates River.
One Iraqi held a sign underneath one of the bodies which read: "Falluja is the cemetery for Americans".
Some of the dead men were wearing flak jackets, according to a resident quoted by the Associated Press.
US television networks showed only edited pictures of the incident, and did not broadcast pictures of the bodies being dragged through the streets.
Television coverage of a similar incident during the US military presence in Somalia in 1993 caused widespread anger and revulsion among Americans. The US army subsequently withdrew from the country.
Increasing presence
Falluja lies within the so-called Sunni triangle north and west of Baghdad, where support for Saddam Hussein remains strong.
Coalition forces have been trying to build up their presence in Falluja, to identify insurgents they believe to be operating there.
About 20km (12 miles) north-west of Falluja, five US servicemen from the 1st Infantry Division died when their vehicle ran over a bomb in Malahma in al-Anbar province, the US military said.
At least 10 people were also reported injured in a suspected car bomb attack in the town of Baquba, north of Baghdad.
US military officials in Iraq say there are now an average of 26 attacks against coalition troops every day, a figure which has increased over recent months.
The casualty figures are even higher for Iraqis, particularly those who are seen to be working with the US-led authorities.
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