Protest camps across Iraq began fracturing on Monday over whether to back premier-designate Mohammad Allawi or continue opposing the government, marking a pivotal point for the four-month-old movement.

One demonstrator was killed in southern Iraq, medics and security sources said, after men in blue caps, the signature headgear of followers of cleric Moqtada Sadr, attacked an anti-regime rally. Iraq's capital and mainly-Shia south have been rocked by months of protests demanding an overhaul of the government, but Allawi's appointment as premier on Saturday has so far failed to quell the rallies.

Most young protesters have rejected Allawi, twice communications minister, as too close to the ruling elite and a product of consensus among much-reviled parties.

But Sadr, who has backed the rallies and demanded reform, has both welcomed Allawi's appointment and urged his followers to stay in the streets.

That has sparked confusion and created a rift in protest squares across Iraq between organised Sadrists and angry, leaderless youth.