Masked gunmen shot dead a human rights activist and mother of four outside a supermarket in Basra on Tuesday, a brazen daylight assassination that threatens to worsen tensions in the southern city wracked by protests.

A police official said Soad al-Ali, who has been involved in organising protests demanding better services in the city, was killed instantly by the gunmen who fled the scene after shooting at her and her husband as they were getting in their car. Ali, 46, was killed on the spot while her husband was wounded and was being treated in a hospital.

The official spoke on condition of anonymity because he was not authorised to give official statements, The Associated Press reported.

The assassination, which occurred on a street in the Abbasiya district in the center of Basra, is the first such incident since protests erupted this summer. Angry Basra residents have repeatedly taken to the streets in recent weeks to protest failing government services, including water contamination that sent tens of thousands to hospitals.

Earlier this month, protests turned violent when demonstrators attacked and torched government offices, the headquarters of the Iranian-backed militias and Iran's consulate in Basra - in a show of anger over what many residents perceive as Iran's outsized control over local affairs.

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Protest activists have described a campaign of intimidation and arbitrary detentions by the powerful militias and political groups that control Basra, a city of more than 2 million people in southern Iraq's Shia Muslim heartland.

Some militia leaders in Basra accused protesters of colluding with the US, which has long worked to curb Iranian influence in Iraq. Ali was pictured during a meeting she held with the US Consul General in the province of Basra, Timmy Davis, more than a month ago.

There was no immediate claim of responsibility for Tuesday's attack, which came as protests resumed following a two-week hiatus. Protesters are demanding basic services and the release of those detained in previous demonstrations. Dozens of young men and activists have been arrested over the protests.