Southern Iraq was in bloody upheaval Thursday after a government crackdown killed 28 protesters and thousands defied a curfew to join funeral marches, following the dramatic torching of an Iranian consulate.

Iraq's capital and south have been rocked by the worst street unrest since the 2003 US-led invasion that toppled Saddam Hussein, with a protest movement venting fury at the government and its backers in neighbouring Iran.

Late Wednesday, demonstrators outraged at Tehran's political influence in Iraq burned down the Iranian consulate in the shrine city of Najaf, yelling "Victory to Iraq!" and "Iran out!"

In response, Prime Minister Adel Abdel Mahdi early Thursday ordered military chiefs to deploy in several restive provinces to "impose security and restore order", the army said.

But by the afternoon, after the protesters' deaths, the premier had already sacked one commander, General Jamil Shummary.

Shummary had been dispatched to the premier's birthplace of Nasiriyah, a southern city that has been a protest hotspot for weeks.

The ensuing crackdown was particularly bloody, with at least 25 protesters killed and more than 200 wounded as security forces cleared sit-ins with live fire, medics and security sources said.