Iraq's parliament has yet to vote on the agreement, under which the U.S. will require Iraqi permission to stay in the country beyond 2011.
Anti-American Shia cleric Moqtada al-Sadr said at a meeting with lawmakers: "Do not vote for the agreement." Under the pact, "the occupier will still remain. If you are told that it would give sovereignty to Iraq, it is a lie."
The cleric's supporters waved banners on the streets saying "No to the occupation!" and "No to America!", and burned U.S. flags, along with effigies of President George W. Bush. However, no violence was reported.
A message from Sadr was read out to the crowed, saying: "I reject and condemn the continuation of the presence of the occupation force, and its bases in our beloved land."
Foreign Minister Hoshiyar Zebari has said the agreement is temporary, and non-binding.
The pact would oblige U.S. troops to end street patrols by mid-2009, and would allow Iraq to prosecute U.S. servicemen for severe crimes committed in Iraq while off-duty.