The clash with U.S. troops in Baghdad began when former Iraqi soldiers waiting in line for promised back pay began throwing rocks. Officials at a Baghdad hospital said one Iraqi had been killed and several wounded. The U.S. army said two of its soldiers were wounded.

In Basra, a British soldier heard gunfire and shot dead an Iraqi holding a weapon while waiting in a backpay line. British soldiers also fired rubber bullets to disperse the crowd.

Charles Heatley, a spokesman for the U.S.-led administration of Iraq, said the unrest was fueled by Saddam loyalists who spread the rumor that there was not enough money to pay all the former Iraqi soldiers. Jobless men also staged violent protests in Najaf and at a pay center in the town of Hilla.

Meanwhile, President Bush said again Saturday that Iraq's transition to self rule is a complicated process that will take time. But he said the United States will keep its promise to return the government to the Iraqi people.

In his weekly radio address, Mr. Bush said the White House proposal for Iraqi funding includes money to train the new Iraqi army, as well as police and emergency personnel, and to establish a judicial system.

In the Democratic response to the president's remarks, Missouri Governor Bob Holden said the international community, not just American taxpayers, should pay for rebuilding Iraq and preparing it for democracy. He said spending on Iraq is draining resources that are needed at home.