Masked men led the protesters marching through the mixed Sunni-Shia town chanting against Iraq's new interim Prime Minister Iyad Allawi.
They shouted: "We sacrifice our souls and blood for you, Saddam" and "No, no to Allawi".
The demonstrators brandished portraits of Saddam Hussein and condemned moves by Allawi's government to put the deposed president on trial for crimes against his people.
"Saddam will remain the symbol of Iraq and the Arab nation," one banner read. "We condemn the staged trial of President Saddam," read another.
Saddam Hussein, who was captured by US troops in December, appeared before an Iraqi judge on 1 July at the start of proceedings that could lead to formal indictments for war crimes, crimes against humanity and genocide.
In another demonstration a handful of anti-Saddam Hussein demonstrators gathered in a central Baghdad square on Sunday to burn his effigy and call for his execution.
They unfurled a banner that read: "Defending Saddam is defending brutality and crime."