The eruption of gunfire was sudden and ferocious, round after round mowing down terrified men women and children, slamming into cars as they collided and overturned with drivers frantically trying to escape. Some vehicles were set alight by exploding petrol tanks. A mother and her infant child died in one of them, trapped in the flames.
The shooting on Sunday, by the guards of the American private security company Blackwater, has sparked one of the most bitter and public disputes between the Iraqi government and its American patrons, and brings into sharp focus the often violent conduct of the Western private armies operating in Iraq since the 2003 invasion, immune from scrutiny or prosecution.
Blackwater's security men are accused of going on an unprovoked killing spree. Hassan Jabar Salman, a lawyer, was shot four times in the back, his car riddled with eight more bullets, as he attempted to get away from their convoy. Yesterday, sitting swathed in bandages at Baghdad's Yarmukh Hospital, he recalled scenes of horror. "I saw women and children jump out of their cars and start to crawl on the road to escape being shot," said Mr Salman. "But still the firing kept coming and many of them were killed. I saw a boy of about 10 leaping in fear from a minibus, he was shot in the head. His mother was crying out for him, she jumped out after him, and she was killed. People were afraid."
At the end of the prolonged hail of bullets Nisoor Square was a scene of carnage with bodies strewn around smouldering wreckage. Ambulances trying to pick up the wounded found their path blocked by crowds fleeing the gunfire.
Yesterday, the death toll from the incident, according to Iraqi authorities, stood at 28. And it could rise higher, say doctors, as some of the injured, hit by high-velocity bullets at close quarter, are unlikely to survive.
With public anger among Iraqis showing no sign of abating, the US administration has suspended all land movement by officials outside the heavily fortified Green Zone.
The Iraqi government has revoked Blackwater's licence to operate but it still remains employed by the US government. The Secretary of State, Condoleezza Rice, has, however, promised a "transparent" inquiry into what happened.
Blackwater and the US State Department maintain that the guards opened fire in self-defence as they reacted to a bomb blast and then sniper fire. Amid continuing accusations and recriminations, The Independent has tried to piece together events on that day.
The reports we got from members of the public, Iraqi security personnel and government officials, as well as our own research, leads to a markedly different scenario than the American version. There was a bomb blast. But it was too far away to pose any danger to the Blackwater guards, and their State Department charges. We have found no Iraqi present at the scene who saw or heard sniper fire.
Witnesses say the first victims of the shootings were a couple with their child, the mother and infant meeting horrific deaths, their bodies fused together by heat after their car caught fire. The contractors, according to this account, also shot Iraqi soldiers and police and Blackwater then called in an attack helicopter from its private air force which inflicted further casualties.
Blackwater disputes most of this. In a statement the company declared that those killed were "armed insurgents and our personnel acted lawfully and appropriately in a war zone protecting American lives".
The day after the killings, Mirenbe Nantongo, a spokeswoman for the US embassy, said the Blackwater team had " reacted to a car bombing". The embassy's information officer, Johann Schmonsees, stressed " the car bomb was in proximity to the place where State Department personnel were meeting, and that was the reason why Blackwater responded to the incident" .
Those on the receiving end tell another story. Mr Salman said he had turned into Nisoor Square behind the Blackwater convoy when the shooting began. He recalled: "There were eight foreigners in four utility vehicles, I heard an explosion in the distance and then the foreigners started shouting and signalling for us to go back. I turned the car around and must have driven about a hundred feet when they started shooting. My car was hit with 12 bullets it turned over. Four bullets hit me in the back and another in the arm. Why they opened fire? I do not know. No one, I repeat no one, had fired at them. The foreigners had asked us to go back and I was going back in my car, so there was no reason for them to shoot."
Muhammed Hussein, whose brother was killed in the shooting, said: "My brother was driving and we saw a black convoy ahead of us. Then I saw my brother suddenly slump in the car. I dragged him out of the car and saw he had been shot in the chest. I tried to hide us both from the firing, but then I realised he was already dead."
Jawad Karim Ali was on his way to pick up his aunt from Yarmukh Hospital when shooting started and the windscreen exploded cutting his face. " Then I was hit on my left shoulder by bullets, two of them another one went past my face. Now my aunt is out of hospital and I am sitting here. There was a big bang further away but no shots before the security people fired, and they just kept firing."
Baghdad's "Bloody Sunday" has become a test of sovereignty between the powers of the Iraqi government and the US. The Iraqi Prime Minister, Nouri al-Maliki, said: "We will not tolerate the killing of our citizens in cold blood." The shooting was, he said, the seventh of its kind involving Blackwater.
The company, which has its headquarters in North Carolina, is one of the largest beneficiaries of the lucrative occupation dividend, holding the contract to provide security for top-level American officials.
Its reputation in Iraq is particularly controversial. It was the lynching of four of the company's employees in 2004 which led to the bloody confrontation in Fallujah. The men's bodies were set on fire, dragged through the streets and then hung from a bridge. Blackwater personnel are recognisable from their "uniform" of wraparound sunglasses and body armour over dark coloured sweatshirts and helmets. Employees are thought to earn about $600 (£300) per day.
Sunday's shooting happened at Mansour, once one of the most fashionable districts of Baghdad, with roads flanked by shops selling expensive goods, restaurants and art galleries. In the height of the sectarian bloodletting between Shias and Sunnis earlier this year dead bodies would be regularly strewn in the streets. A semblance of safety has returned since, and Mansour was held up as an example of how the US military "surge" was cutting the violence.
We were in Mansour on Sunday when we heard the sound of a deafening explosion just after midday. Black plumes of smoke rose from a half-blasted National Guard (army) post near a mosque. Five or six minutes afterwards there was the sound of prolonged shooting towards the south.
Police Captain Ali Ibrahim, who was on duty near Nisoor Square, said: " We heard the bomb go off, it was very loud, but it wasn't at the square. The police were, in fact, trying to clear the way for the contractors when they became agitated, they opened fire. No one was shooting at them."
Asked about the witness accounts, Ali al-Dabbagh, an Iraqi government spokesman, confirmed: "The traffic policemen were trying to open the road for them. It was a crowded square and one small car did not stop, it was moving very slowly. They started shooting randomly, there was a couple and their child inside the car and they were hit."