Thousands of followers of anti-American cleric Moqtada al-Sadr took to the streets on Saturday in a demonstration against a pact that would allow U.S.  forces to stay in Iraq for three more years.

Marchers waved Iraqi flags and chanted “Yes, yes Iraq! No, no to the occupation!”

“It is a peaceful demonstration, demanding that the occupier leave and the government not sign the pact,” Ahmed al-Masoudi, a Sadrist member of parliament, told Reuters.

Demonstrators set fire to a U.S. flag, but the atmosphere appeared mostly peaceful.

Iraqi authorities said the demonstration was authorised and security had been increased to protect the protesters, who were marching from Sadr’s stronghold of Sadr City in the east of the capital to a nearby public square at a university.

“They have permission from the prime minister and the interior minister to hold a peaceful demonstration,” the government’s Baghdad security spokesman Qassim Moussawi said.

“It is a part of democracy that people can protest freely, but we hope that they will understand the security measures that we have taken to protect them,” he said. Male and female security screeners were in place to search bags on the route.

Sadrists described the event as a rescheduled “million man march” initially called in April when Sadr followers were battling U.S. forces in Baghdad and the south. But now, with little fighting taking place, the numbers appeared much smaller.

Still, the show of strength by Sadr’s followers was a reminder to the government of the hostility among much of the public to the pact with the United States.

The pact would replace a U.N. Security Council resolution authorising the U.S. presence and give Iraq’s elected government authority over the U.S. force for the first time.

It must be approved by Iraq’s parliament, and support is far from assured, even though Iraq won important concessions from Washington over the course of months of negotiations.

U.S. officials have yet to explain the pact in public, but Iraqi leaders have disclosed its contents.

The pact commits the United States to end patrols of Iraqi streets by mid-2009 and withdraw fully from the country by the end of 2011 unless Iraq asks for them to stay, an apparent reversal for a U.S. administration long opposed to deadlines.

It also describes certain conditions under which Iraq would have the right to try U.S. service members in its courts for serious crimes committed while off duty.

In Washington, officials in the administration of President George W. Bush briefed members of Congress about the pact on Friday and sought reassure them that it protects U.S. troops.

“I think there is not reason to be concerned,” Defense Secretary Robert Gates told reporters, adding that top military brass were happy with the protections in the pact.