"We call on the Iraqi people, those who are duty bound, to defend their right for legitimate elections," declared a statement by the rally organisers.
The protesters, who included doctors and engineers, gathered in front of Shia cleric Grand Ayat Allah Ali al-Sistani's office in Najaf, 160km south of Baghdad, brandishing banners on which they had written "No, no to community divisions."
"We call on the United Nations and other authorities not to oppose the desire of the Iraqi people to choose their own representatives," the statement said.
The demonstrations took place even as Iraqi political forces were discussing on Friday how their next government should be chosen after UN chief Kofi Annan ruled out nationwide elections before a 30 June return of sovereignty to the country.
Interim Governing Council members were meeting to consider what course to take after Annan recommended Iraqis should choose a caretaker government until elections for a national assembly can be held.
Annan has ruled out elections
before 30 June
The Iraqi politicians and US occupation officials were studying a range of options, and the discussions looked to be contentious as Iraq's fractious ethnic and religious camps pushed various ideas.
In the hours after Annan's remarks, Secretary of State Colin Powell ruled out the original US plan for caucuses to select the next government. That was an apparent olive branch to Iraqi Shias, who had strongly opposed the idea.
US officials said they were waiting for Annan's team to unveil the various options it had identified before they commented on how to move forward.
Proposals on the table include calling a national conference to choose a caretaker adminstration, partial elections or a handover of power to the Governing Council, Iraqi political figures said.
With the lack of clarity on exactly what Annan is proposing, the country's Shia majority, which had threatened street protests and civil disobedience if polls were not held, were planning their next move carefully.
"We were expecting the decision but we would like the elections to have happened," said Haitham al-Husayni, a spokesman for the Supreme Council for the Islamic Revolution in Iraq (SCIRI), the main political party in Iraq.
"We thought the elections could have happened not in a perfect way, but at least we would have consulted the Iraqi people"
Spokesman for SCIRI
"We thought the elections could have happened not in a perfect way but at least we would have consulted the Iraqi people," he said on Thursday.
Responding to Annan's announcement, Dawa, another Shia party that resisted the rule of Saddam Hussein, said
elections had to be held before the US presidential vote in November.
Meanwhile, Governing Council members were readying their proposals on how to form the caretaker government when the US-led occupation ends.
Faisal Istrabadi, senior adviser to Sunni Governing Council
member Adnan Pachachi, said it would take eight to 10 months to hold elections for a transitional national assembly.
Until elections, the Governing Council or a combination of the council and current cabinet ministers might form a caretaker government, he said.
But Istabadi cautioned that the elected government should serve only until the nation's constitution was completed and that there should then be a new round of polls.
The various scenarios will probably delay the completion of the fundamental law, which is to govern Iraq until a constitutuion is completed. The transitional law was to be completed by the end of February, Istrabadi said.
"We need to agree on a definite date for elections, and we have to carve this date in stone"
Iraqi Governing Council member
Amendments will now probably be added to it at a later date, he added.
In the Kurdish camp, Bakthar Amin, deputy to Governing Council member Mahmud Uthman, said one solution would be to hold a national conference to choose a caretaker government, based on the Afghan model from 2001.
But the Shias appeared to react cooly to this, with Governing
Council member Muwaffaq al-Rubaie saying "we are not Afghanistan."
Al-Rubaie said any deal struck now had to answer his religious group's questions about when elections were going to be held.
"We need to agree on a definite date for elections, and we have to carve this date in stone." He worried that the caretaker government might be subject to manipulation.
"We have to ensure that body is totally impartial because they will have to organise the elections," he said.