Police and witnesses could not immediately give more details about the gunmen except to say they were in a convoy of four SUVs commonly used by private security companies and the Iraqi Ministry of Interior.
The women were in a white car that drove into the Masbah intersection in the central Karradah district as the convoy of three white and one gray SUVs was stopped about 100 meters (yards) away, according to a policeman who witnessed the shooting from a nearby checkpoint.
The men in the SUVs threw a smoke bomb in an apparent bid to warn the car against coming forward, said Riyadh Majid, the policeman. The woman driving the car tried to stop, but was killed along with the passenger when two of the guards in the convoy opened fire, Majid said.
The pavement where the attack occurred was stained with blood and covered with shattered glass from the car windows.
He said the convoy then raced away and Iraqi police came to collect the bodies and tow the car to the local police station.
Another policeman, who spoke on condition of anonymity because he feared retribution, said the guards were masked and wearing khaki uniforms. He said one of them left the vehicle and started to shoot at the car while another opened fire from the open back door of a separate SUV.
The victims were identified by relatives and police as Marou Awanis, born in 1959, as Geneva Jalal, born in 1977.
"These are innocent people killed by people who have no heart or consciousness. The Iraqi people have no value to them," said a man who was part of a group of relatives gathered with a Christian priest at the local police station.
The man said Awanis had three daughters. "Who will now raise the girls? They are now motherless," he said.
Awanis' sister-in-law, Anahet Bougous, said the woman had been using her car to taxi government employees to work to help raise money for her three daughters.
"May God take revenge on those killers," Bougous said, crying outside the police station. "Now, who is going to raise them?"
While there was no indication Blackwater USA was involved, the attack threatened to increase calls for limits on the security firms that mounted after the Sept. 16 shooting deaths of as many as 17 Iraqi civilians allegedly that company's guards. The American security company said its employees were acting in self-defense.