Baghdad: Three protesters were shot dead by Iraqi security forces who opened fire on a crowd trying to storm the Iranian consulate in the Shi'ite Muslim holy city of Kerbala overnight, security and medical sources said on Monday.

The incident was the latest sign of anti-Iranian anger that has emerged during the biggest wave of demonstrations in Iraq since the fall of Saddam Hussein.

Burning tyres and chanting "Iran out, Kerbala remains free," the crowd assembled in front of the consulate late on Sunday.

"We came here today to revolt and hold a protest in front of the Iranian consulate. We came to pull down the Iranian flag and lift the Iraqi flag instead," said one protester in Kerbala who refused to be identified.

Hundreds of Iraqis have died in demonstrations since the start of October, protesting against a government they see as corrupt and beholden to foreign interests.

Iraq's official human rights watchdog confirmed the deaths. The Iraqi High Commission for Human Rights (IHCHR) said three people were killed due to bullet wounds. A dozen were injured, including security forces, it said.

The IHCHR said the crowd tried to break into the consulate. Security sources said they tried to torch it. Iraq is committed to protecting diplomatic missions, the foreign ministry said.

"The foreign ministry condemns the attack by some protesters on the Islamic Republic of Iran's consulate in holy Kerbala. The security of missions and consulates is a red line that cannot be crossed. Actions like this will not affect the friendly and neighbourly relations tying both countries," it said.

Kerbala is located at the site of a 7th century battle that marked the schism between Sunni and Shi'ite Islam. It hosts the world's largest annual religious pilgrimages, attended by millions of people from Iran, the main regional Shi'ite power.

Protesters see Iran as the main power behind the Shi'ite political parties that have wielded power in Iraq since the U.S.-led invasion that brought down Saddam.

The spread of anti-Iranian sentiment deep into Iraq's Shi'ite heartland signals a broad discontent with Tehran's interference, and Iraqi Shi'ites' shifting priorities with sectarian identity taking a back seat to economic concerns.

"The Iranians and the parties affiliated with Iran harm us. We will never let any Iranian stay in Kerbala. We will not let any lackeys stay in Kerbala," the Kerbala protester said.

"No Iranian will remain in Kerbala or across Iraq."

In the capital Baghdad, where the protests have swelled dramatically over the past week, Thousands of anti-government protesters gathered in central Baghdad on Monday, defying a plea by the prime minister to stand down.

Root out the elite

Since putting down an insurgency by Islamic State in 2017, Iraq has enjoyed two years of comparative stability. But despite its oil wealth, many people live in poverty with limited access to clean water, electricity, healthcare or education.

The protesters blame a political system that shares power among sectarian parties, making corruption entrenched.

"The youth have lived through economic hardships, explosions, oppression. We want to root out this political elite completely," said a protester who had camped overnight in Baghdad's Tahrir Square. He asked that he not be identified.

Prime Minister Adel Abdul Mahdi appealed to protesters on Sunday night to suspend their movement, which he said had achieved its goals and was hurting the economy.

The premier has said he is willing to resign if politicians agree on a replacement, and has promised a number of reforms. But protesters say that is not enough and that the entire political class needs to go.

Since last Wednesday, protests have halted operations at Iraq's main Gulf port Umm Qasr, which receives the bulk of the country's food imports.

The political class is seen by many as subservient to one or other of Baghdad's main allies, the United States and Iran, foes who use Iraq as a proxy in a struggle for regional influence.

Reuters reported last week that a powerful political party had contemplated withdrawing support for Abdul Mahdi but decided to keep him in power for now after holding a secret meeting in Baghdad attended by a general from Iran's Revolutionary Guards.