BAGHDAD - Rival Iraqi factions took to the streets of Baghdad on Friday to call for a new government, with supporters of Shi'ite cleric Moqtada al-Sadr demanding early elections and his Iran-backed opponents saying the results of last October's poll should be honoured.

Thousands of Sadr's followers prayed outside parliament in a show of support for the populist leader who has called on the judiciary to dissolve parliament by the end of next week.

Hours later, supporters of Iran-backed groups opposed to Sadr rallied on the edge of the fortified Green Zone, where parliament and foreign embassies are located, insisting they should form the new government based on the October election.

Friday's protest and counter-protest were the latest in a series of demonstrations that have raised fears of unrest if the political stalemate continues. Religious and political leaders command the loyalty of huge numbers of people and militia groups operate independently from central government.

Sadr emerged as the biggest winner from October's election but failed to form a government free of Iran-backed parties. He withdrew his lawmakers from parliament and is now preventing it from electing a new government and is demanding early elections.

Thousands of his supporters gathered outside parliament on Friday. Most were dressed in black to mark the Muslim month of Muharram and some wore white capes symbolising burial shrouds and their willingness to die.

"You will not break Iraq as long as Sadr is here," an imam told the crowd from a big stage set up outside parliament. "There is no going back from this revolution ... and the people will not give up their demands."

In the intense summer heat, men picked their way through the worshippers and sprayed them with cold water. Some carried portraits of Sadr and his father, also a prominent cleric, as well as Iraqi flags.

"We have revolted and there is no going back," said Mohammed Elwan, 40, carrying a portrait of Sadr.

Hamid Hussain, a father of five, said: "I am here to call for an early election and make sure that all the corrupt faces are excluded from the upcoming elections...I became unemployed because of the corrupt parties."


Sadr's opponents also accuse him of corruption. They say his loyalists have run some of Iraq's most corrupt and dysfunctional government departments.

Hours after the demonstration for Sadr, thousands of people rallied to call for a government to be formed from the pro-Iranian factions in parliament who oppose Sadr.

Some carried portraits of Major-General Qassem Soleimani, head of Iran's elite Quds Force, and an Iraqi militia commander who was killed alongside Soleimani in a U.S. air strike in Baghdad more than two years ago.

"This man fought for us," said day labourer Abu Ali al-Bahani, referring to the picture of Soleimani he was carrying. "We want a government to be formed based on the democratic elections that we participated in."

As night fell, protesters supporting the pro-Iran groups started setting up tents to begin an open-ended sit-in until their demands are met.

"Today we will stage a sit-in ...the people cannot handle another election... we are tired," said Mohamed Yasin, 35, day labouror.

There were smaller protests in other provinces.

Sadr counts millions of Iraqis among his followers and has shown he can still stir up gatherings by hundreds of thousands of supporters, mostly working-class Shi'ite Muslims, if he needs to exert political pressure.

(Writing by Dominic Evans Editing by Ros Russell and Frances Kerry)