By Kristin Roberts

SANTIAGO, Oct 3 (Reuters) - U.S. Defense Secretary Robert Gates said on Wednesday the U.S. military in Iraq should have better control over all private security contractors in Iraq who often operate without the knowledge of commanders.

A Pentagon team, reporting just weeks after State Department contractors were involved in a shooting that killed 11 Iraqis, recommended the U.S. military command in Iraq be given more information about the activities of thousands of contractors operating in the war zone, Gates said.

The team recommended more coordination between the coalition's military command -- Multi-National Forces-Iraq -- and private security contractors, who guard facilities and convoys transporting U.S. government civilians, Gates said.

"About 30 percent of the calls for help, for quick reaction forces, come from convoys that MNF-I doesn't know are out there," Gates told reporters en route to Chile during a five-nation tour of Latin America.

"So the idea is, how do you coordinate this in a way that MNF-I has a better picture of what's going on in its own area," he said, discussing the review team's suggestions, which he called "commonsensical."

Private security contractors have come under intense scrutiny since contractors with the U.S. firm Blackwater were involved in a shooting while escorting a convoy through Baghdad last month. That incident is under investigation and has infuriated Iraqis who see the thousands of security contractors operating throughout Iraq as private armies that act with impunity.

The Pentagon employs at least 7,300 security contractors in Iraq, but none from Blackwater. The State Department employs thousands more.

HEAVY-HANDED TACTICS

Military commanders also have complained about what are often described as heavy-handed tactics employed by contractors and voiced uncertainty about their authority over those private workers.

In response to those concerns, the Defense Department last week issued a memo to commanders outlining their authorities over security contractors.

The review team also recommended the U.S. military selectively apply military law, known as the Uniform Code of Military Justice, against contractors acting inappropriately, Gates said. But he noted outstanding legal questions about whether military law could be applied to civilians working as security contractors as well as practical questions, such as who would decide when to pursue cases under the code.

The U.S. House of Representatives is poised to vote on an expansion of current legislation to ensure all contractors are accountable under U.S. criminal law. The bill would expand the Military Extraterritorial Jurisdiction Act, which covers defense department contractors, to all civilians working for the U.S. government.

Despite the controversy, Gates and military officers say contractors are necessary in Iraq because they free up soldiers for other tasks.

If the Iraqi government were to restrict the activities of security contractors or bar a security firm from the country, the U.S. military would have to step in or the civilians working in Iraq would have to curtail travel.

The Pentagon chief called those alternatives "counterproductive" given the U.S. government's effort in reconstruction, economic and political activities that are led by State Department civilians in Iraq.

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