The demonstrations erupted when Iraqi former servicemen awaiting payment of back salary in Baghdad and the southern port of Basra were told by coalition troops that no money was being handed out at this stage.

They came a day after two Iraqis were killed, one in the capital and the other in Basra, when the veterans, awaiting a one-off payment of 40 dollars, clashed with US-led coalition forces.

About 400 former soldiers protested in Basra, with protestors throwing rocks at the British soldiers who responded by firing rubber bullets to disperse the crowd, an AFP reporter observed.

With gun battles on the streets of Baghdad over the weekend, Bush chose to put a positive spin on his successes in Iraq during a weekly radio address.

"Our forces know that a secure and sovereign Iraq will be a setback for terrorists, and an inspiration to all who dream of freedom in the Middle East," he said.

"And the world can be certain, this essential mission in the war on terror will be completed".

* US forces headquarters outside the town of Baqubah came under mortar attack overnight, a witness said yesterday but did not know if there were any casualties.

"Four mortar bombs targeted the headquarters of the American forces who fired back with tank shells," 25-year-old Walid Mohammad told AFP.

- Nampa-AFP

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