"The surge in the use of private companies should not be confused with the traditional use of mercenaries in armed conflicts."

Why?

I mean, here is the Merriam Webster definition of mercenary:

Main Entry: 1mer·ce·nary
Pronunciation: 'm&r-s&n-"er-E
Function: noun
Inflected Form(s): plural -nar·ies
Etymology: Middle English, from Latin mercenarius, irregular from merced-, merces wages -- more at MERCY
: one that serves merely for wages; especially : a soldier hired into foreign service.

And the Britannica's definition is even better:

mercenary
hired professional soldier who fights for any state or nation without regard to political interests or issues. From the earliest days of organized warfare until the development of political standing armies in the mid-17th century, governments frequently supplemented their military forces with mercenaries.

These soldiers are being paid by the US government as part of the US military forces in Iraq, yet are not part of the official military. They are serving the highest bidder in a foreign country. So how are these soldiers not mercenaries?

As to the argument that using mercenaries for "security", I have no idea what else they are doing in Iraq, but going by the way their bodies were desecrated, I'd say the Iraqis who did it may not view them as being all that innocent and neutral. Usually those sorts of acts are committed when the victims of the desecration are greatly reviled for their own perceived atrocities by those who commit the acts. It is quite possible there are atrocities being committed by both the private and official military forces in Iraq, isn't it, and that the Iraqis in Fallujah have targeted the mercenaries now, rather than the soldiers, who have pulled back to their bases for the most part.