BASRA, Jan 15: Tens of thousands of demonstrators shouting "No to America" marched in Basra on Thursday in a huge show of strength by Iraq's Shias against US plans for a transitional government.

An aide to Iraq's most revered Shia leader said Grand Ayatollah Ali al Sistani could issue a fatwa banning Iraqis from backing the US-appointed interim cabinet if Washington did not hold direct elections for a sovereign Iraqi government.

An edict by Ayatollah Sistani could turn many Shias against the United States at a time when occupation forces are battling guerillas in the centre of the country.

Demonstrators chanted "Yes, yes for Islam; No America, No Saddam" and slogans promoting unity with the Sunnis. Ayatollah Sistani has objected to US plans for a transitional Iraqi assembly to be selected by regional caucuses rather than an election. The assembly will select an interim government that is due to take over sovereignty by the end of June.

"If (US administrator Paul) Bremer rejects...Ayatollah Sistani's opinion, he would issue a fatwa (edict) depriving the US-appointed council of its legitimacy," Ayatollah Sistani's aide, Ayatollah Mohammad Baqer al Mohri, said in an interview with Abu Dhabi Television.

Paul Bremer returns to Washington this week for consultations that US officials say are routine, but take place as the Bush administration reviews how a new Iraqi transitional government will be chosen.

In Basra, the protesters marched to a mosque, waving banners and photographs of Ayatollah Sistani, although he himself did not attend. A religious figure in Basra, Ali al Hakim al Safi, told the crowd at the mosque that Shias would seek their goals by peaceful means - for now.

"We do not need to use violence to get our rights while there are still peaceful ways we can work together," he said. "But if we find peaceful means are no longer available to us we will have to seek other methods."

US officials and most of Iraq's US-appointed Governing Council say the country cannot hold elections until 2005. They have been trying to persuade Ayatollah Sistani to soften his stance.

Paul Bremer has said he respects Ayatollah Sistani but that there is not enough time to hold elections before handover of sovereignty. US officials say they are reviewing the plan for regional caucuses to make the process as open as possible.

"The demonstrators are a small minority of the local Iraqi population," British Prime Minister Tony Blair said at a news conference in London. "They now have the freedom to demonstrate. They never had it under Saddam, but they've got it now."

The head of the Governing Council said he hoped that the ayatollah would come around. "Sistani would prefer elections...perhaps he is not fully convinced that elections are not possible," Adnan Pachachi told a news conference. "(But) he would like to be persuaded that it's not possible."

He also warned that if the handover had to await elections, it would extend the US occupation beyond June. "We either go through the whole process of selection or postpone it. It's our choice," Mr Pachachi said.

The United States and the Governing Council are pushing for the United Nations to play a role in the political transition by overseeing the regional caucuses.

Abdul Aziz al Hakim, a Shia on the Governing Council, wrote to UN Secretary-General Kofi Annan asking the United Nations to study the possibility of early polls or find a compromise path to election of an assembly.

Mr Annan said in reply that it was technically impossible to organize elections by June and stopped short of promising U.N. action in solving the dispute or endorsing the current process. -Reuters