BASRA, June 29 (IslamOnline.net & News Agencies) - Hundreds of former Iraqi soldiers mounted an angry protest at British headquarters in the southern city of Basra Sunday, June 29, to demand back wages and condemn backtracking on relevant promises, later dispersing after striking a deal.

The soldiers had placed barbed wire and large rocks in front of the main entrance to the British headquarters in Saddam Hussein's old Al-Barazhiya palace, to blockade the compound, an Agence France-Presse (AFP) correspondent said.

"One of the representatives was brought into the palace and the issue was resolved," Lieutenant Commander Clive Woodman said, adding that there had been" one or two instances of stone throwing and a small fire lit."

"There were around 200 people outside the palace this morning, the same people as were down there yesterday, ex-Iraqi soldiers," he said, adding that there had been no injuries on either side and that the crowd had dispersed.

"The payment will take place Tuesday," he added.

The Iraqis had hurled stones, preventing two British ambulances from driving out of the former palace and prompting an armored vehicle to take up position at the entrance, the correspondent said.

After threats of armed insurrection in Baghdad, the U.S.-led occupation forces said last week that it would begin regular payments to members of the disbanded army in mid-July, backtracking on plans to give former soldiers a one-off payment.

Woodman could not account for why the former Iraqi soldiers in Basra were due to be paid before this date, only saying, "We are given a certain amount of discretion here on the ground" regarding the application of the policy of the U.S.-led forces.

The British have incorporated large numbers of former soldiers into security forces patrolling to prevent smuggling in the port city.

One of the demonstrators had earlier said the protest had followed British promises to pay wages on Saturday, June 28, which was then twice delayed.

"The British forces had promised to pay our wages on Saturday, so we came but they told us to come back on Sunday. Today, they asked us to come back tomorrow, they are liars," said non-commissioned officer Kazem Ayal.

"There are members of the Baath party working with them to draw up lists, and we think they are doing everything to prevent the payment of our salaries," Ayal charged.

Protestors said that the former soldiers had gathered in front of the British HQ on Saturday, but when they were told to return the next day, they started a demonstration.

They also claimed a Kuwaiti national in civilian dress had driven out of the palace during Saturday's protest, and opened fire with a Kalashnikov rifle at the feet of the crowd, wounding two former Iraqi soldiers.

Woodman confirmed that there had been "a shooting incident" during a demonstration on Saturday, without elaborating.

British military officials said they considered the killings an isolated incident that did not signal growing unrest in the mainly Shiite Muslim south, where rebuilding efforts are further advanced than in much of the rest of Iraq.

U.S. and British forces have already come under growing attacks from demobilized troops, many of whom melted away with their weapons after the ouster of Saddam's army.

The protesting military people, carrying banners that dismissed the illegal American decision and the occupation of their country, threatened organized armed resistance if the Americans fail to heed their demands.