By James Vicini

WASHINGTON, Dec 5 (Reuters) - U.S. officials expect to announce criminal charges soon against Blackwater security guards over a shooting in Iraq last year that killed 17 civilians and strained U.S.-Iraqi relations, law enforcement sources said on Friday.

The sources, who declined to be identified, said details of the charges could be announced as early as Monday.

A federal grand jury in Washington has been hearing evidence in secret about the shooting by the private security firm's guards as they escorted a convoy of U.S. diplomats through Baghdad on Sept. 16, 2007.

The charges would come after more than a year of FBI investigations in one of the most high-profile cases remaining before President George W. Bush leaves office next month.

North Carolina-based Blackwater, the largest security contractor in Iraq, has said its guards acted lawfully and in self-defense after their motorcade came under fire in the chaotic incident. It has cooperated in the investigation.

The guards, U.S. military veterans hired to protect U.S. diplomats overseas, were responding to a car bombing when shooting erupted in a crowded Baghdad intersection.

The Iraqi government has said the guards deliberately killed the 17 civilians and an Iraqi investigation said there was no provocation for the guards to have opened fire.

The shooting enraged the Iraqi government, which wanted to put the contractors under Iraqi legal jurisdiction. Iraqis also were upset in April when the State Department renewed Blackwater's contract to protect U.S. personnel in Baghdad.

The incident set off debate in Washington about the use of private contractors in war zones.

Justice Department spokesman Dean Boyd declined to comment. Blackwater spokeswoman Anne Tyrrell declined to comment and said she had no information about any charges.

CNN reported five guards have been indicted and a sixth was in plea negotiations. The exact charges are not publicly known because the indictments remain under seal, it said.

ABC reported the five guards have been told to surrender to the FBI by Monday to face federal manslaughter and assault charges. The investigation revealed that two guards did most of the shooting, ABC said.

A grant of limited immunity by State Department investigators to several guards in exchange for their sworn statements right after the shooting complicated efforts to bring charges, Justice Department officials have said.

If those guards are charged, U.S. prosecutors must show they did not rely on their statements and used other evidence.

Defense lawyers are expected to bring various court challenges in seeking dismissal of the charges. (Editing by John O'Callaghan)

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