By Aziz El Yaakoubi and Nadine Awadalla

BAGHDAD (Reuters) – Gunmen shot dead two protesters in Iraq’s southern city of Nassiriya overnight and a Baghdad district became a battlefield on the third day of a drive by security forces to end months of demonstrations against the largely Iran-backed ruling elite.

Clashes over the weekend had already killed at least five protesters and rockets hit the U.S. embassy compound in Baghdad’s fortified Green Zone housing government buildings.

Security sources told Reuters three people were wounded when at least one rocket landed inside the U.S. embassy compound, the first time in years that an attack on the Green Zone – a regular occurance – had actually hurt staff there.

The Iraqi military said five Katyusha rockets had hit the Green Zone late on Sunday, without reporting casualties. The U.S. embassy was not immediately available for comment.

Authorities began the pushback on Saturday to try to end protests that began in the capital on Oct. 1 and in other southern cities. Demonstrators are demanding the removal of all politicians, free elections and an end to corruption.

In Nassiriya, at least 75 protesters were wounded, mainly by live bullets, in overnight clashes when security forces tried to move them away from bridges in the city, police and health sources said.

Unknown gunmen in four pickup trucks had attacked the main protest camp there, shooting dead the two people and setting fire to demonstrators’ tents before fleeing the scene, the sources said.

Some protesters began building more permanent structures using bricks, Reuters witnesses said, while others broke into a police office on Monday and set fire to at least five police vehicles parked inside.

The leaderless movement is an unprecedented challenge to Iraq’s Shi’ite Muslim-dominated and largely Iran-backed ruling elite, which emerged after a U.S.-led invasion toppled Sunni dictator Saddam Hussein in 2003.

“REVOLUTION”

Pitched battles raged in the Khilani area of central Baghdad near Tahrir Square, on Monday with protesters throwing stones and Molotov cocktails at security forces using tear gas, live rounds in the air and slingshots to push them back.

Some of the demonstrators danced on the protest frontline while others shielded themselves behind concrete blocks and trees or by using metal sheets.

“This revolution is peaceful. They use various kinds of fire against us, live ammunition, bullets and teargas canisters. I got injured in my face,” said Allawi, a hooded protester who gave only his first name.

Tuk tuks darted through the crowd to help the wounded and carried away protesters suffering from teargas inhalation.

Demonstrations continued in other southern cities, despite repeated attempts by security forces to clear up their camps.

Nearly 500 people have been killed in the unrest, with both security forces and unidentified gunmen shooting people dead.

After a lull earlier this month, demonstrations resumed; protesters have controlled three key bridges in Baghdad and maintain camps and road blocks in several cities in the south.

The government has responded with violence and piecemeal reform. The international community has condemned the violence but not intervened to stop it.

Saturday’s push by the authorities began after populist cleric Moqtada al-Sadr said on Friday that he would halt the involvement of his supporters in the demonstrations.

Sadr had backed the demands of protesters for the removal of corrupt politicians and for the provision of services and jobs soon after the demonstrations began in October, but stopped short of calling on all his followers to join in.

“Everyone has come out protesting against the government,” said Hussain, a protester. “We demand that all politicians resign and get out. We don’t want Moqtada or any of them.”

(Reporting by Aziz El Yaakoubi, Nadine Awadalla, Baghdad bureau; Writing by Ahmed Rasheed, Editing by William Maclean and Philipaa Fletcher)