Sunni and Shia Muslims marched
together in Baghdad
Almost 10,000 people took part in the demonstration in northern Baghdad.
Religous leaders from both Sunni and Shia sects of Islam marched together from Al Adhamiya - a Sunni neighbourhood to Al Kadhimiya - a Shia centre in Baghdad.
The massive demonstration came on the same day that US administrator of Iraq, Paul Bremer, started his second week there.
He is facing growing criticism that he back-pedaled on pledges to give Iraqis a leading role in creating a new interim government
Bremer was in Mosul on Sunday where he met the Mayor and local council. They came to power earlier in the month under US-supervised elections from leaders of the city's six main ethnic communities.
He called it, "a great example of embryonic democracy".
In other developments:
At least 100 bus drivers demonstrated on Monday for the return of their company boss after US authorities fired him because of his Baath party background.
The demonstrators gathered outside the Palestine Hotel and praised the professional qualities of Yaarub Hussein, director general of the Public Transport Company.
A senior company employee said Hussein was a member of one of the many branches of the Baath party, which led to his dismissal. Paul Bremer has banned all ex-Baath officials from government jobs.
Demonstrators defended Hussein however, saying Iraqis who worked in the state civil service had no choice but to be members of the Baath party.
Iraqis want US forces to withdraw
Meanwhile, looting and lack of security across the country is hindering efforts to restore oil output, a senior Iraqi official told Reuters.
The Iraqi oil ministry official, speaking on condition of anonymity, said Baghdad was now aiming to reach 1.3 million barrels per day (bpd) by mid-July. The target has already been put back twice and could be further delayed if security did not improve, he said.
“The pillage and looting at the oil installations this time was much more devastating than in 1991,” said the official in reference to the Gulf War of that year.
“In some areas it’s getting worse rather than better,” he added.
The country is now pumping 310,000 bpd compared to 2.5 million before the war.
It needs 550,000 bpd to meet domestic energy needs before it can resume exports to finance reconstruction.
The official said lack of security meant there was a risk even to recently repaired facilities.
Southern oil fields have suffered the heaviest looting. Looters badly damaged a degassing station for supplies of gas to a liquefied petroleum gas plant in the north of the country.