Iraq's finance minister warned Friday that he will make more cuts in government spending next year and urged ministries to curb expenses to offset the effects of the drop in world oil prices.

Iraq depends on oil revenues for more than 90 percent of its budget. On Friday, oil prices fell below $45 a barrel - down from a peak of more than $147 a barrel last summer.

Finance Minister Bayan Jabr said in a statement that the Finance Ministry will reconsider the budget in early 2009 and order austerity measures if necessary to make up for the revenue shortfall.

Last month, the Iraqi government adopted a revised 2009 budget of $68.6 billion. The original budget for next year was $79 billion. Revenues are based on an oil price of $62.50 per barrel, down from an original estimate of $80.

He said that the ministry is watching the falling oil prices carefully and would take measures next year to "revise the budget and scale down unnecessary expenditure as a way to ensure the continuity of the economy."

Such moves would impact on the government's stumbling reconstruction efforts aimed at rebuilding the country's crumbling infrastructure - especially energy, electricity and oil facilities.

Earlier this year, Jabr said that about $15 billion of the 2009 budget had been earmarked for reconstruction.

"We call on all ministries and local governments to continue reconstruction, but at the same time reducing expenditures and cutting down any unnecessary expenses," Jabr said in the statement.

Talk of cutbacks and austerity is a strong setback to optimistic forecasts for the Iraqi economy last summer where oil prices were soaring.

The number of Sunni volunteers - many of them ex-insurgents - joining Iraq's security forces continues to swell despite an uneasy relationship with the Shiite-led government, a top U.S. commander said.

At the urging of the U.S., Prime Minister Nouri al-Maliki's government reluctantly committed to absorbing up to 20 percent of the nearly 100,000 members of the Sons of Iraq, also known as Awakening Councils, into the security services in a move toward reconciliation with the minority Sunni Arab community.

Army Lt. Gen. Lloyd Austin, the No. 2 U.S. commander in Iraq, said two months after the U.S. turned control of the Sons of Iraq over to the Iraqi government, there has been no indication that al-Maliki does not intend to honor his promise.

"Since we started this transition program, all I have heard is its not going to work," Austin told The Associated Press in an interview Thursday. "It will work. The government of Iraq wants it to work. The Sons of Iraq want it to work. Our leadership wants it to work."

The Iraqi government also has promised to pay the rest of the Sunni volunteers until it can find them civilian jobs. Many of them were former insurgents who battled U.S. and Iraqi troops before agreeing to work with American troops against al-Qaida.

U.S. officials fear some will return to the battlefield if the government does not honor its pledge.

The Iraqi government began last month paying the salaries of about 54,000 mostly Sunni fighters in Baghdad province. Monthly income is expected to be about $300, the same amount that the Americans paid.

But many Iraqi officials are openly contemptuous of the volunteers, fearing they may turn against the Shiites once the Americans leave.

Austin said he recognizes that deep suspicions remain, a concern that appeared to be addressed during a recent meeting at an Iraqi army base with Maj. Gen. Mizher Shakir Nasief, commander of the 11th Iraqi Army Division.

During the meeting observed by the AP, Austin asked how the Sons of Iraq were assimilating into the security forces.

"I tell my soldiers to treat them equally and get the benefit of their experience," Nasief said, adding that some of the Sunni soldiers recently provided intelligence that led to insurgent arrests in Baghdad.

U.S. prosecutors visited on Saturday the site of last year's shooting that left 17 Iraqis dead in a Baghdad square and briefed victims' families about the case against Blackwater Worldwide guards indicted in the deadly incident.

Five Blackwater guards were indicted this week on manslaughter and other charges for their alleged roles in the Sept. 16, 2007 shooting in Nisoor Square. A sixth guard reached a plea deal with prosecutors to avoid a mandatory 30-year prison sentence.

"The aim of our visit is to meet the families of the victims and explain the charges that have been filed in the United States and to make ourselves available to any questions they might have," U.S. prosecutor Kenneth Kohl told reporters in a brief statement at the police headquarters just off the square.

The shooting in heavy traffic at the central traffic circle sparked international condemnation, launched U.S. congressional hearings and inspired anti-American insurgent propaganda.

The case fueled Iraqi anger over what they perceive as heavy-handed behavior by private security contractors, who enjoyed blanket immunity from prosecution under Iraqi law.

U.S. investigators linked Blackwater Worldwide guards to 70 shooting incidents involving civilians before Nisoor Square and only two since then.

A new U.S.-Iraqi security pact lifts security guard immunity, although it will be retained for on-duty American troops and contractors working with them.

Witnesses and an Iraqi investigation said the shooting on Nisoor Square was unprovoked. But Blackwater - the largest U.S. security contractor in Iraq - has said the guards were acting in self-defense after they were ambushed.

During a private meeting, Kohl repeatedly pressed Iraqi police commander Lt. Gen. Hussein al-Awadi on whether any Iraqi policemen opened fire that day - presumably against the Blackwater guards, according to those who attended the talks.

Al-Awadi insisted that no policemen opened fire, the attendees said on condition of anonymity because they were not authorized to talk to media.

Kohl thanked the Iraqi police for their help and for helping tamp down public outrage over the killings. He said the U.S. investigation, which involved 250 interviews over several months, determined the shooting was unjustified and he was determined to prove it in court.

"People are people, as human beings," al-Awadi replied. "And the law is the law."

Al-Awadi said U.S. and Iraqi forces had blocked a second Blackwater Worldwide convoy from reaching the square after the shooting erupted.

"My husband was looking for a job at the square that day. When he reached the square, the security members killed him," said Milad Khalil, whose husband Odai Ismael was killed in the incident. "My two girls need money to cover the elementary school expenses."

Adel Jabr, who was wounded at Nisoor Square, said he wants punishment for the guards and compensation for his suffering.

"I have undergone several surgeries including skin grafts," he said. "I am spending most of time lying in bed. I have a family to feed, but I cannot work. We want to be treated the same way that U.S. citizens are treated."

Younis Khudhair Abbas, whose uncle and cousin were killed at the square, said family members were told not to discuss details of the meeting because their comments might be used by the defense.

"We asked to be sent to America to attend the trial. We also asked for compensation," Abbas said. "After meeting with the prosecutors, we became more hopeful of good results and we got the feeling that the American administration is honest."

But Wisam Rahim, who was wounded on the square, said the guards should be executed.

"Blackwater vehicles and helicopters were firing at us. I demand that these guards be executed. We want to see justice done," he said.

The five men have been charged with 14 counts of manslaughter, 20 counts of attempted manslaughter and one count of using a machine gun to commit a crime of violence. The machine gun charge, typically used in drug cases, carries a 30-year minimum prison sentence.

The Blackwater guard who struck a deal pleaded guilty to killing one Iraqi and wounding another.

Iraqi investigators found that 17 Iraqis were killed in the assault.