So, no one in Baghdad uses bodyguards? All Iraqi policemen must be at all the time in uniform, even for covert entry? I don't think an AK is any convincing ground for believing them to be insurgents. Americans aren't the only ones with rights to carry guns, specially in the most dangerous city on Earth.
At 4:12, it definitely looks like there's an RPG. Even more so at 4:19.
It's a pity you couldn't be bothered to watch thirty seconds more of the video. At 4:49, when the helicopter goes around the house, we see the full group, one second or so before the fire starts. No one is holding an RPG.
What you say that looks like one is actually a glimpse of some sort of tube. I guess construction workers must have a hard time on Baghdad, if that's grounds for use of deadly force.
The helicopter was called in by ground troops who were taking small arms fire from a small group of men in this area.
They seem very relaxed, for insurgents in the middle of a fire fight. They are walking, move in a close group, are calm and walk exposed in the middle of the street. Not exactly standard military procedure.