Islamabad has rejected reports that the US Blackwater security contractor, which has gained ill-fame in Iraq, has now expanded its activities to Pakistan.

“Blackwater is not operating in Pakistan, we have our own system, rules and regulations and will not allow any body to operate from here," Interior Minister Rehman Malik said on Friday, Press TV's correspondent reported from Islamabad.

Malik's comments came after sources from among the Pakistani intelligence agencies, citizens and political parties reported that Blackwater USA was present in the country.

Pakistani Defense Analyst Sheerain Mizari says that the notorious security firm is now not only operating the Northwest Frontier Province but also in the capital Islamabad.

She believes that the Blackwater operators are also active in Peshawar and Quetta. According to Mizari, two Blackwater men were among those who died in the recent attack on Pearl Continental Hotel in Peshawar.

The US embassy, however, has refused to comment on Balckwater's presence in Pakistan.

“We don't discuss security, issues related to the security that include the contractors, who are assigned the security tasks,” said embassy spokesman Richard W Snelsire.

Reports of company's presence in Pakistan follow a strange decision by Islamabad to allow an employee of Blackwater, who was deported for establishing illegal contacts with pro-Taliban militants, back into the country.

Craig Davis was found guilty of engaging in secret discussions with pro-Taliban militant leadership without taking any branch of the government into confidence.

Although Blackwater continues to work for the US government in Iraq under the disguise of its new name, Xe Services LLC, it is still under investigation in the US for the killing of 17 Iraqi civilians in Baghdad almost two years ago.

Five former Blackwater guards have already been indicted for their roles in the massacre.

This is while the firm's owner could face murder charges over the disappearance of individuals cooperating with US federal authorities in charge of the probe.

In sworn statements filed on August 3 in a Virginia federal court, a former employee and a former US marine testified that company owner and CEO Erik Prince murdered or arranged the murder of those planning to provide information against them.

In a seventy-page motion, they also accused Prince of a list of other criminal activities such as smuggling weapons into Iraq, using child prostitutes, and deploying mentally ill recruits.

MJ/DT