Baghdad, a key ally of Iran, has announced a three-day mourning period for Khamenei, and Iraq's top Shiite cleric Grand Ayatollah Ali Sistani urged Iranians to remain united against the "aggressors".

Khamenei was killed on Saturday as the United States and Israel launched a wave of strikes on the Islamic republic.

US defence systems intercepted at least two drones on Sunday over the city of Erbil, the capital of the autonomous Kurdistan region, which hosts US-led coalition troops, an AFP journalist said.

Explosions were heard and smoke was visible in the sky, the journalist reported from near the consulate in Erbil.

Earlier Sunday, Iran's army said it targeted US bases in Iraq's Kurdistan.

A small Iraqi pro-Iran group also claimed drone attacks there.

Loud explosions were heard and smoke rose in the early morning near Erbil airport, which hosts US troops, an AFP photographer said.

Like the US, Iran wields significant influence in Iraqi politics, while also backing armed groups whose power has grown both politically and financially.

Iraq, which has recently gained a sense of stability but has long been a proxy battleground between the US and Iran, warned that it did not want to be dragged into the war.

But it did not remain unscathed.

- 'Embassy of evil' -

Several Iran-backed Iraqi armed groups said Saturday they would not remain "neutral" and would defend the Islamic republic.

The powerful group Kataeb Hezbollah said it would attack US bases after two of its fighters were killed in air strikes in southern Iraq.

Also Saturday, US-led coalition forces downed several missiles and explosive-laden drones over Erbil, local authorities said.

Pro-Iran groups later said they launched dozens of drones against "the enemy bases in Iraq and the region", without providing further details.

The US embassy in Iraq urged its nationals to limit movement and be ready to shelter after "reports of missiles, drones or rockets in Iraqi airspace".

On Sunday, hundreds of protesters, many masked and dressed in black, tried to storm Baghdad's Green Zone to get to the US embassy.

They chanted "for you Khamenei" and hurled stones at security forces, who responded with tear gas, AFP journalists reported.

Abou Ali al-Kanani, 56, who was leading a group of protesters, said "we are here to demand the expulsion of the Americans and the closure of the embassy of evil -- America that killed Ayatollah Khamenei".

Calls were renewed for protests near the embassy later in the evening.

Iraq's top Shiite cleric Grand Ayatollah Ali Sistani, himself born in Iran, mourned Khamenei, saying his "unique role in leading the Islamic Republic of Iran for many years is evident to all".

"The great Iranian people are expected to maintain their unity, to stand firm and thwart the aggressors' sinister goals," he said in a statement.