Several hundred protesters gathered on Wednesday in front of the Nasiriya governorate headquarters, demanding that job promises previously made to them by local authorities be kept.
The rallysts said the authorities had been pledging to provide decent job opportunities since the past two years, but to date nothing had materialised.
Police used force to disperse the crowds, triggering a violent response. Protesters burned several cars and exchanged fire with policemen.
The confrontation left 25 people injured. Medical sources in Nasiriya said none of the injuries was fatal.
"Some of the protesters were members of the former Iraqi army which was disbanded immediately after the US-invasion in 2003. Besides, many political parties participated in the demonstration in support of the unemployed people of Nasiriya," Shaikh Adel al-Abadi, a tribal leader in Nasiriya, told Aljazeera.net.
"The government is not employing people, while factories which used to provide jobs before have not been functioning for years."
Unemployed youths in Nasiriya had organised several peaceful protests in the past, and had threatened to use violence if their demands were not met.
A protester from Nasiriya said he and his friends were feeling ignored by the government.
"We do not sense any seriousness on the government's part in dealing with us. We have held so many protests to let government officials know that we are here and we have demands, but no one has ever made an effort to contact us" he said.
Many former Iraqi army officers
belong to the Nasiriya province
The Nasiriyia protester said: "The only time they speak to us is when we protest, but they forget about us right after we end our protest. I am telling you, this time we reacted with very limited violence but we will not hesitate to use more violence to get our message across."
The vast majority of non-commissioned officers in the disbanded Iraqi army belonged to the Shia Arab governorate of Nasiriya.
The area witnessed fierce resistance during the US-led invasion of Iraq, where fighters managed to hinder the US forces' drive north for days.