A judge has declared a mistrial in the case of a former Blackwater security guard accused of inciting a firefight that killed 14 Iraqi civilians in 2007.
The jury remained deadlocked in the trial of Nicholas Slatten, who was charged with first-degree murder for allegedly firing the first shots.
The case was a retrial, after a court ruled Slatten should not have been tried alongside three other guards.
Neither Slatten nor prosecutors have commented on Wednesday's ruling.
US District Judge Royce Lamberth in Washington DC declared a mistrial after the jury of seven women and five men could not reach a unanimous verdict.
The jury had deliberated for 16 days, even asking Judge Lamberth last week to advise them, the Washington Post reported. The judge gave them until Tuesday to make a decision.
Prosecutors charged Slatten, who was a former Army sniper, with murder as his case had passed the time limit for manslaughter charges.
First-degree murder charges, however, have a higher burden of proof.
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During the retrial, prosecutors alleged Slatten, 34, fired first, sparking the violence that left 14 dead.
They accused Slatten of hating Iraqis and starting the firefight as an act of revenge for the 9/11 terrorist attacks, USA Today reported.
The defence retaliated by saying Slatten was innocent, especially as another Blackwater guard - Paul Slough - had initially confessed to firing the first shots.
According to prosecutors, Slough was inconsistent - at first, he denied that he started the firefight, then changed his statement and said he had.
Dane Butswinkas, an attorney for Slatten, said the government's case was made up of "guesswork, speculation and conjecture".
The Justice Department has not commented regarding retrying the case, US media say.
The Post reported that many jurors stayed after the mistrial ruling to speak with attorneys for Slatten and the government about the case.
What's the background?
In Baghdad's Nisoor Square in 2007, the Blackwater security guards opened fire while escorting a US convoy.
Fourteen civilians died and another 17 were injured. The men claimed they were under fire from insurgents.
The firefight ignited an international debate over the role of defence contractors and strained US-Iraq relations.
Since 2008, the cases of these Blackwater employees have been in and out of the courts. Dozens of survivors and relatives of those killed by the shooting have testified in the US during the course of the proceedings.
Slatten and his colleagues Paul Slough, Dustin Heard and Evan Liberty were convicted in 2014 and sentenced the following year.
Slatten received a life sentence for murder while the other three were jailed for multiple counts of manslaughter, attempted manslaughter and using firearms while committing a felony.
A panel of judges on the US Court of Appeals later ruled 2-1 that the sentencing - 30 years each - for Slough, Heard and Liberty violated the constitution as "cruel and unusual punishment" and that they should be resentenced.
Last year, a court ordered a retrial for Slatten, saying he should not have been tried alongside the three other security guards who were convicted for the Baghdad incident as Slough initially claimed he had fired the first shots.