Thousands of supporters of powerful Shi'ite Muslim cleric Moqtada al-Sadr filled a central Baghdad square on Friday, disregarding government pleas to scrap protests it said would distract from the war against Islamic State.
The demonstration ended a respite from street actions which in April and May saw protesters storm Baghdad's heavily-fortified Green Zone government district twice, hampering parliament for weeks and causing several deaths.
Sadr's followers have returned with familiar demands to fight corruption and overhaul a governing system based on ethnic, sectarian and party quotas.
Prime Minister Haider al-Abadi has failed to implement a cabinet reshuffle he promised months ago as part of reforms.
The protests have at times boosted Abadi in his bid to replace ministers chosen on the basis of political affiliation with independent technocrats, but he has said more recently they risk undermining the military's push to kick Islamic State out of its northern Mosul stronghold.
Activity in much of Baghdad crawled to a halt overnight as security forces deployed ahead of the demonstration, following a military parade in central Baghdad marking a national holiday.
Sadr visited Tahrir Square briefly on Wednesday wearing military fatigues instead of his usual clerical robe and turban, raising fears of a possible confrontation.
Abadi then toured several security checkpoints late on Thursday in an apparent attempt to bolster his image amid a rising wave of public outcry with residents blaming the government for failing to provide security.
Emotions in Baghdad are still raw following a suicide bombing in the central Karrada district on 3 July, claimed by Islamic State, that killed at least 292 people, making it one of the worst among the hundreds of such attacks carried out in Iraq since U.S.-led forces toppled Saddam Hussein 13 years ago.
Islamic State has been turning increasingly to suicide bombings, which U.S. and Iraqi officials have touted as proof that battlefield setbacks are weakening the jihadists, though critics say the militants still pose a long-term threat.
A media office linked to the military issued a statement on Thursday calling Friday's protests "unlicensed" and threatening to deal with armed demonstrators as "terrorists".
Sadr supporters pledged to carry on with the protest but promised it would be peaceful. There were no reports of serious violence several hours into the demonstration, after which people began to withdraw.
Sadr, who rose to prominence when his Mahdi Army battled U.S. troops after the 2003 invasion, briefly ascended the stage in Tahrir (Liberation) Square to address his supporters, many of whom had travelled from outlying provinces.
A spokesman then issued a list of demands, including sacking the prime minister, president and parliament speaker; prosecuting corrupt officials; ending the quota system; reforming the judiciary and the election commission; and televising parliament sessions.
As the statement ended, protesters waving Iraqi flags chanted: "Yes, yes for Iraq! Yes, yes for reform!"