Protesters also called for US forces to leave Iraq
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Hundreds of former Iraqi soldiers have staged a protest in Baghdad demanding pay following the disbanding of the army.
Demonstrators in civilian clothes massed outside the offices of the US-led administration currently running Iraq, complaining of financial hardships.
The administration last month abolished the 400,000-strong armed forces and defence ministry. Monday saw it announce that recruitment for a new army would begin before the end of June.
The new United Nations special representative for Iraq, Sergio Vieira de Mello, has arrived in Baghdad, pledging that he will work closely with the US-led coalition and make self-government for the Iraqis a priority.
Iraqi suspicion
The former ruling Baath party has been dissolved amid US efforts to set up an alternative power structure in the country.
But a US official's suggestion that a planned national conference to elect an interim administration might be scrapped has provoked more suspicion among Iraqis.
The UN envoy has pledged to work towards an interim government
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The latest proposals would establish a political council and appoint Iraqi advisers to help the administration run government ministries.
The BBC's Richard Miron in Baghdad says the vagueness of the new ideas and the lack of concrete deadlines have convinced some Iraqis that this is a delaying tactic by the Americans to strengthen their hold on the country and extend their stay indefinitely.
The UN envoy Mr Vieira de Mello said he was looking forward to taking up his new job and said that the priority was to set up an interim Iraqi administration as soon as possible so that the Iraqi people could govern themselves.
The BBC's Tristana Moore in Baghdad says the US and Britain went to war without any backing from the UN, leaving the UN envoy in a difficult position.
Our correspondent says Mr Vieira de Mello has a vague mandate in Iraq - while he will co-ordinate the UN humanitarian operation and assist in the reconstruction of the country, he has no executive power.
Attack threat
Monday's protest in Baghdad by former military officials was largely peaceful although a number of demonstrators were reported to have been arrested.
Many of those present claimed they could no longer feed their families.
"The Americans should know that at least five people depend on every Iraqi soldier and they need a source of income," one ex-general told the French news agency AFP.
Another ex-officer said that a foreign occupying force did not have the right to dissolve the Iraqi army.
There is growing frustration among Iraqis towards the coalition
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And others even threatened suicide attacks against US forces attacks unless they were paid.
The protest, which at its peak was estimated to have been attended by more than 3,000 angry soldiers, broke up after coalition officials reportedly promised that the demands would be discussed.
However, they stressed that no promises over pay had been made.
US officials are said to be planning a new Iraqi army of about 40,000-50,000 men.
"We expect to begin recruiting members of the New Iraqi Corps before the end of this month," the US civilian administrator Paul Bremer said on Monday.
"We are looking at other ways to stimulate the economy."