Loyalists of Shiite Muslim cleric Moqtada Sadr -- a militiaman-turned-politician with a cult-like following -- had raided a protest camp in Iraq's shrine city of Najaf late Wednesday.

Seven anti-government demonstrators were killed by bullets to the head or chest, medics in the city said, and dozens more were wounded. In the melee, tents where protesters had slept for weeks were burned down.

It marked the bloodiest episode yet in escalating tensions between the bulk of the demonstrators and Sadr, who had initially backed the rallies but split with the movement suddenly last weekend.

Sadr then endorsed Mohammad Allawi as the country's new prime minister designate, in stark contrast to most of the protesters who reject the politician as an establishment figure.

Allawi, 65, served as communications minister twice since the US-led invasion of 2003 but also stepped down twice, citing corruption in the government.

In Baghdad's Tahrir Square on Thursday, anti-Allawi demonstrators said they were determined to continue the protests that started in October and have repeatedly been marred by violence.

Nearly 490 people have been killed and 30,000 wounded, most of them demonstrators, according to a count compiled by AFP from security and medical sources.

"We've finally got used to it," said Tayba, a Baghdad high school student who had the Iraqi flag tied around her shoulders.

"In fact, we're even more determined. Before, the students used to hold just one demonstration a week, now there are three."

- Solidarity marches -

In the Wednesday night attack, Sadr supporters flooded the main anti-government tent city in Najaf, witnesses said, and clashes erupted before security forces intervened to separate the two sides.

Sadrists went on to occupy the site themselves, AFP journalists said.

Tensions between the two camps had already boiled over, with Sadr supporters -- typically identified by blue caps -- storming squares and harassing rival demonstrators, who have taken up chants against the cleric.

The events late Wednesday prompted solidarity rallies across other protest-hit cities, with a march in Baghdad's Tahrir Square decrying the bloodshed.

Violence also broke out earlier this week in the southern city of Hilla, where one protester was stabbed to death after Sadrists attacked an anti-government rally there.

Sadr then ostensibly tried to calm the tensions, urging his followers through a Twitter post to focus solely on making sure schools, roads and government buildings shut by months of protests would reopen.

Allawi, when he announced his candidacy, had extended a hand to the protesters and urged them to keep up their rallies.

He was appointed on February 1 to succeed Adel Abdel Mahdi, who had resigned in December but stayed on in a caretaker role.

He has since met with representatives of the movement, pledging to release anyone detained for demonstrating, compensate the families of those killed in protest-related violence and work with the United Nations to implement demonstrators' demands.

Allawi has until March 2 to form his government, which must be confirmed by a vote of confidence by parliament.