Iraqis began voting on Sunday in a parliamentary election that Sunni Islamist insurgents have vowed to derail in an effort to plunge the war-shattered country back into sectarian bloodshed as US troops leave.

Scattered explosions occurred as polling stations opened at 7 am (0400 GMT). At least three mortar rounds landed near voting centres in the town of Baiji, 180 km (110 miles) north of Baghdad, wounding three people, police said.

Several blasts from mortar rounds, rockets or bombs echoed over the capital, including the Green Zone, a fortified government and diplomatic enclave, but police reported no casualties.

Iraq's political course will be decisive for President Barack Obama's plans to halve US troop levels over the next five months and withdraw entirely by end-2011. It will also be watched closely by energy companies that have committed themselves to investing billions in Iraq's vast oilfields.

Voters in the ethnically and religiously divided country can pick between mainly Shi'ite Islamist parties that have dominated Iraq since Saddam Hussein's fall and their secular rivals.  "This election marks another step in the march of our democracy -- and also a test," said President Jalal Talabani, a veteran Kurdish politician seeking another term.

No bloc is expected to win a majority, and it may take weeks or months to form a government, risking a vacuum that armed groups such as Iraq's Al Qaeda offshoot might exploit.   

Few elections in the Middle East have been as competitive as this one. Its conduct could determine how democracy in Iraq affects a region used to kings and presidents-for-life.

About 6,200 candidates from 86 political groups are vying for 325 parliamentary seats. Shi'ite Prime Minister Nuri Al-Maliki, whose State of Law coalition is claiming credit for improved security since the peak of sectarian warfare in 2006-07, faces a challenge from one-time partners looking to recapture Shi'ite support.   

He also takes on a secular list tapping into exasperation with years of conflict, poor public services and corruption, and hoping to gain support from the Sunni minority once dominant under Saddam's rule.

Former Prime Minister Iyad Allawi, a secular Shi'ite who heads the cross-sectarian, secularist Iraqiya list, is already complaining about irregularities in early voting.   

"Iraq, which they wanted to turn into a theatre of crimes, has become a theatre of democracy, elections and freedom," Maliki said on the eve of the vote.

Last week 600,000 people, including soldiers and detainees, voted early. Up to two million Iraqi expatriates and refugees abroad can also vote.

Some of Maliki's rivals allege intimidation and arrests, adding to tensions created by a ban on 400 candidates accused of links to Saddam's outlawed Baath party -- a furore which exposed the lingering divide between Sunnis and Shi'ites.

"We need to see the will of the Iraqi people fully exercised in this coming election. Otherwise, Iraq will be thrown back to severe violence," Allawi said as he concluded his campaign.   

In Anbar province, a Sunni bastion, tribal sheikh Ahmed Abu Risha said Sunnis were hoping the poll would make them feel they had a real stake in their now Shi'ite-dominated country.

"Change is our goal. We want to put fresh blood in the political process," said Abu Risha, leader of the so-called Awakening Councils which helped the US military push back a raging Al Qaeda-inspired Sunni insurgency.   

The Islamic State of Iraq, an Al Qaeda affiliate that views the Shi'ite-led government as heretical, has warned Iraqis not to vote and vowed to attack those who defy them. - Reuters