The activist, Saadoun al-Luhaybi, was shot in the head in a southwestern neighbourhood of the Iraqi capital, the police source said.

He had been taking part in youth-led demonstrations rocking Iraq since early October that have demanded the ouster of a governing class seen as corrupt, inept and beholden to Iran.

The protesters have occupied Baghdad's iconic Tahrir Square, just across the river Tigris from the Green Zone, home to government offices, the United Nations headquarters and foreign embassies.

On Tuesday, an angry mob marched into the Green Zone and to the US embassy, outraged over American air strikes that killed fighters from the Hashed al-Shaabi military force.

They besieged the embassy for just over 24 hours, leaving on Wednesday afternoon after an order from the Hashed.

The anti-government demonstrators who have been taking to the streets for months insist their movement is entirely unrelated to the crowds that besieged and vandalised the American mission.

"We've got nothing to do with that," one demonstrator in the southern protest hotspot city of Diwaniyah told AFP.

Protesters still occupied the streets in the city, where they have shut down most government offices and schools.

They briefly allowed local government offices to reopen to let employees receive their salaries at the end of the year, an AFP correspondent said.

Violence also hit the southern city of Nasiriyah overnight, with two activists surviving separate attempts on their lives.

Around a dozen activists have died in targeted killings across the country, among the nearly 460 lives lost in protest-related violence over the past three months.

Demonstrators have warned that these killings, along with kidnappings and different forms of harassment, are an attempt to scare them into halting their movement.

"What happened in front of the US embassy was an attempt to draw people's eyes away from the popular protests now in their fourth month," said Ahmed Mohammad Ali, a student protester in Nasiriyah.

"We're still here, protesting for change and hoping for victory," he told AFP.