FALLUJAH, Iraq: Seven anti-government protesters killed by Iraqi troops were buried on Saturday, followed by a rally calling for Iraq's premier to quit, sharply raising tensions amid weeks of angry demonstrations.

The deaths in the predominantly Sunni town of Fallujah, west of Baghdad, were the first since protests began last month, and came as tens of thousands rallied in Sunni areas, railing against alleged targeting of their minority by the Shiite-led authorities.

While some Shiite clerics gave cross-sectarian support to the protests, Prime Minister Nuri al-Maliki blamed demonstrators and insisted soldiers had been "attacked."

The deaths have raised tensions in a country that only relatively recently emerged from brutal communal bloodshed that left tens of thousands dead from 2005 to 2008, and is just three months away from provincial elections.

Friday's rally had been moving from central to eastern Fallujah, 60 kilometres (35 miles) from Baghdad, but was blocked off by soldiers, police captain Nasser Awad said.

Protesters began throwing bottles of water at the troops, who opened fire.

Seven demonstrators were killed, all of them from gunshot wounds, said Assem al-Hamdani, a doctor at Fallujah hospital. Hamdani said 60 others were wounded, most by gunfire.

The defence ministry has promised an investigation into the killings, and security responsibilities in the town have been transferred to the police in an attempt to defuse tensions.

Iraq's state broadcaster reported that as the troops were vacating Fallujah, two soldiers were wounded by gunfire.

On Saturday, thousands attended the funeral of the seven people killed on Friday.

A demonstration followed the burials during which protesters shouted: "Listen Maliki, we are free people" and "Take your lesson from Bashar," a reference to embattled Syrian President Bashar al-Assad whose country is in the grip of a bloody 22-month uprising.

"I will not be satisfied with compensation provided by the defence ministry," said Ali Khalaf al-Ani, whose son Omar was killed on Friday, referring to an offer for financial compensation by Baghdad.

"I want my son alive -- that is my demand!"

Maliki called for restraint by security forces in a statement issued by his office, but also said that soldiers had been attacked in the first place.

"This is what Al-Qaeda and terrorist groups are seeking to exploit," he said of apparent sectarian tensions.

The premier also blamed "conspiracies" propagated by the intelligence agencies of neighbouring countries, supporters of now-executed Iraqi dictator Saddam Hussein, and Al-Qaeda.

In addition to Fallujah, large demonstrations also took place on Friday in several other Sunni cities in north and west Iraq, as well as in Sunni neighbourhoods of Baghdad.

The protests have hardened opposition against Maliki and come amid a political crisis ahead of provincial elections due in April.