Demonstrators outraged at Tehran's political influence in Iraq burned down the Iranian consulate in the shrine city of Najaf, yelling "Victory to Iraq!" and "Iran out!" (Yahoo News)

Southern Iraq was in bloody upheaval Thursday after a government crackdown killed 28 protesters and thousands defied a curfew to join funeral marches, following the dramatic torching of an Iranian consulate.

Iraq’s capital and south have been rocked by the worst street unrest since the 2003 US-led invasion that toppled Saddam Hussein, with a protest movement venting fury at the government and its backers in neighbouring Iran.

Late Wednesday, demonstrators outraged at Tehran’s political influence in Iraq burned down the Iranian consulate in the shrine city of Najaf, yelling “Victory to Iraq!” and “Iran out!”

In response, Prime Minister Adel Abdel Mahdi early Thursday ordered military chiefs to deploy in several restive provinces to “impose security and restore order”, the army said.

But by the afternoon, after the protesters’ deaths, the premier had already sacked one commander, General Jamil Shummary.

Shummary had been dispatched to the premier’s birthplace of Nasiriyah, a southern city that has been a protest hotspot for weeks.

The ensuing crackdown was particularly bloody, with at least 25 protesters killed and more than 200 wounded as security forces cleared sit-ins with live fire, medics and security sources said.

The provincial governor in Nasiriyah, Adel al-Dakhili, blamed the crackdown on Shummary, who was the military commander in the southern port city of Basra when demonstrations there were brutally suppressed in 2018.

Dakhili demanded the premier sack him, and hours later, Abdel Mahdi ordered Shummary removed from his post.

The latest violence brought the death toll since early October to over 380, with more than 15,000 wounded according to an AFP tally. Authorities are not releasing updated or precise figures.

The province of Dhi Qar announced three days of mourning for the dead in provincial capital Nasiriyah, where thousands took to the streets in funeral processions, defying a curfew announced there earlier in the day.

“We’re staying until the regime falls and our demand are met!” they chanted.

Demonstrators who had been dispersed by security forces regrouped at Nasiriyah’s main police station, setting it on fire.

They then encircled its main military headquarters as armed members of the area’s influential tribes deployed along main highways to blockade military reinforcements trying to reach the city.

“The scenes from Nasiriyah this morning more closely resemble a war zone than city streets and bridges,” said Lynn Maalouf of rights group Amnesty International.

The unrest in southern Iraq has escalated since late Wednesday, when protesters stormed the Iranian consulate in the Shiite holy city of Najaf.

An AFP correspondent saw them setting tyres and other items ablaze around the consulate, sending tall flames and thick clouds of smoke into the night sky.

They also broke into the building itself, which had apparently been evacuated by its Iranian staff.

Demonstrators across Iraq have blamed powerful eastern neighbour Iran for propping up the Baghdad government which they are seeking to topple.

Tehran has demanded Iraq take decisive action against the protesters, with foreign ministry spokesman Abbas Mousavi condemning the attack.

“Iran has officially communicated its disgust to the Iraq ambassador in Tehran,” he told Iran’s state news agency IRNA.

Later Thursday, three protesters were shot dead close to the burnt consulate, medics said.

Iran’s consulate in Iraq’s other holy city of Karbala was targeted earlier this month, with security forces shooting four demonstrators dead.

The two countries have close but complicated ties and Tehran holds significant sway among Iraqi political and military leaders.

Top Iranian commander Qasem Soleimani has held several meetings in Baghdad and Najaf to convince political factions to close ranks around Abdel Mahdi.

Those meetings, sources told AFP, brought firebrand cleric Moqtada Sadr back into the fold after he called on Abdel Mahdi to resign.

But on Thursday, he reverted course, saying it would “be the beginning of the end for Iraq” if the government did not step down.

Sit-ins, road closures and street marches have shuttered public offices and schools for weeks in many southern cities.

On Thursday, clashes flared near Karbala’s provincial headquarters between some 200 protesters and riot police using tear gas and flash bangs.

Protesters kept up sit-ins in Kut, Amara and Hilla, all south of the capital, despite an increased security presence.

In the oil-rich port city of Basra, most government offices reopened but schools remained closed as security forces deployed in the streets.

Iraq is OPEC’s second-largest crude producer and the oil exported through Basra’s offshore terminals funds more than 90 percent of the government’s budget.

Protesters have accused the ruling elite of embezzling state funds that are desperately needed to restore failing public services and fix schools.

Corruption is rampant in Iraq, ranked the world’s 12th most graft-ridden country by Transparency International.

The World Bank says one in five Iraqis lives in poverty and youth unemployment stands at 25 percent.