The 34-year-old NSW man was shot along with two other foreign nationals, believed to be an American and a Canadian, while traveling in a convoy on the main road near Baghdad International Airport.

Reuters have named the man as Chris Ahmelman.

The attack came ahead of a missile strike on a civilian Bulgarian helicopter, in which at least nine people died and the discovery of 60 bodies of possibly Shi'ite hostages in the Tigris River.

Another Australian contractor working in Iraq for security company AKE Asia Pacific said today the tempo of violence was on the rise again.

"It appears that it's now picking up again ... it's quite dangerous here," the contractor, identified only as Rodge, told ABC radio.

"You certainly wouldn't want to be on the ground without some kind of protection," he said.

"I would say that things are becoming more unstable here on the ground and every day you can just see people are a little more scared.

"There's a lot of things that are going on behind the scenes that people don't really have a lot of knowledge about."

Rodge said the stretch of road between Baghdad and the airport was a particularly dangerous place.

"I think because it's a main artery for all foreigners coming in and out of the country. That road is essentially pretty much the only way you can get into the country."

The dead Australian had been working as a security officer with British firm Edinburgh Risk and Security Management.

He was the fourth Australian to die in Iraq since the US-led invasion in 2003.

"It's one of those situations where you can be in the wrong place at the wrong time. That road out to the airport is notorious," Rodge said.

"I've narrowly missed car bombings myself. You can get lucky sometimes. I've been on the road and there's not an incident. Other times I've been there and there's been an incident beforehand and an incident after I've gone, so it's a real timing issue."