"Reports today of unrest throughout Iraq are disturbing," said National Security Council spokesman John Kirby after Sadr loyalists stormed the government palace in Baghdad's Green Zone in reaction to his announcement.

"Iraqi institutions are not being allowed to function. This in turn increases the risk of violence," Kirby said.

"Security, stability and sovereignty should not be put at risk... We urge those involved to remain calm, to abstain from this violence and pursue peaceful avenues of redress," he said.

Kirby denied reports that the US embassy in Iraq, also located inside the Green Zone, was being evacuated.

"There's no evacuation going on at the embassy," he said.