"The guards shot at us. There were two injured -- one person in the leg and the other in the hand," said demonstrator Salam Salman, 23.

Police then arrived and surrounded the protest by some 200 unemployed Iraqis outside the Facilities Protection Service (FPS) and fired warning shots, Salman said.

FPS is a security guard service run by the US-led coalition. It protects some civilian sites and national infrastructure, and is affiliated with the interior ministry.

However, it was not immediately clear who fired the shots which injured the protestors or how seriously they were hurt.

After the guards opened fire, Salman and other witnesses said the protestors started to throw rocks and torch cars.

At least one police car and a civilian vehicle were set ablaze.

Police confirmed they had fired into the air to disperse the angry crowd, but claimed no one had been wounded.

Colonel Saad Khadum, chief of the traffic police in the area, said the protestors had gone to the office to seek jobs as security guards.

But he blamed the violence on the crowd. and said the demonstrators were incited by a few angry Iraqis to start throwing rocks and burning vehicles.

He said police fired into the air to disperse them, but drew return fire.

At least four American humvee vehicles were seen patrolling the area.

For his part, Salman accused FPS staffers of selling jobs for money.

"We wanted to be employed at the FPS, but they wanted us to give them bribes," Salman said.

Other demonstrators also said they had given money to FPS personnel in hopes of being hired.

Post-Saddam Hussein Iraq has been burdened by high unemployment as many factories and shops remain closed despite the best efforts of the coalition to rebuild the country.