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BLOODY PROTEST: An Iraqi protester shows his blood-stained shirt after US troops killed two people in Baghdad yesterday. Reuters

US troops kill two Iraqi protesters

The shooting occurred when a US military convoy passed through a crowd led by up to 2000 former Iraqi soldiers who were protesting at their having been sacked by the new US administration.

"There is no god but Allah, America is the enemy of Allah," the crowd chanted in the fierce midday heat. "Down, down USA."

US military officials said a US soldier had fired in self-defence after the convoy was pelted with rocks and two Iraqis were injured and later died.

"Both men who were evacuated died of their wounds," Lieutenant Colonel Richard Douglas said. The complex is the former palace of toppled Iraqi President Saddam Hussein.

The sacked Iraqi soldiers were disgruntled over losing their jobs when US administrator Paul Bremer dissolved Saddam's armed forces last month.

Bremer's drive to destroy the legacy of Saddam's Baathist rule has laid off up to 400,000 Iraqis who worked in the now-disbanded armed forces, security services and information and defence ministries, with no prospect of reintegration.

"We were in a peaceful demonstration asking the US to give us our salaries," Abdul-Rahim Hassan, a former soldier, told Reuters. "We were not fighting them, but suddenly they started shooting at us."

ROCKS HURLED

US Army Captain Scott Nauman, whose men were guarding the compound, told CNN television that Iraqis on the other side of the street had been throwing rocks for nearly an hour before the shooting, but no one had been hurt until the convoy arrived.

"The personnel (Iraqis) on the other side of the street swarmed the convoy, shaking the vehicles, breaking out windows, throwing rocks at extremely close range to the personnel in that convoy.

"(They) felt threatened understandably as their vehicle was swarmed and windows broken out and they fired shots then directly into the crowd and injured two personnel...To me it appeared to be in self-defence."

The captain said his men had fired warning shots over the crowd at the same time.

Asked if there had been shooting from the crowd, he replied: "No, not to my knowledge."

Before the shooting the demonstrators had beaten passing United Nations and television vehicles with their shoes and assaulted a Reuters television crew and other reporters outside.

Critics say the sweeping policy of sacking the soldiers fails to distinguish between the hard men who enforced Saddam's cruel orders, the many who joined the party out of expediency and some who genuinely believed in its Arab nationalist ideology.

They say the policy has created a large pool of armed and resentful unemployed who may turn to crime or to fighting the US-led occupation, perhaps as part of a Baathist underground.

Nauman said the demonstration was the fourth by Iraqi soldiers in the past few weeks and that officials had set up a meeting with some of the protesters for later on Wednesday.

At least 41 American soldiers have been killed in a spate of attacks in and around Baghdad since US President George W Bush declared major combat in Iraq over in early May.