The vote is a critical democratic step for Iraq nearly three years after the invasion, with officials desperately hoping to draw Sunni Arabs back into the political process and undermine support for the insurgency.
Before the majority of the 15.5 million voters cast their ballots, 300,000 Iraqi hospital patients, detainees and members of the security forces voted for the 275 deputies who are to serve four-year terms.
In an atmosphere of jubilation, Iraqi troops in camouflage uniforms punched the air and made ‘V’ for victory signs as they queued outside polling stations in the capital.
Detainees in orange jumpsuits marked ballot papers in jails in the southern city of Samawa, while electoral officials went from bed to bed with transparent ballot boxes in a Baghdad hospital, attending to patients too weak to walk.
Peaceful poll
Calling for a peaceful election, Iraqi Prime Minister Ibrahim Jaafari staunchly defended his 10-month record in office at a Baghdad news conference.
Rivals charge that Jaafari presided over a weak administration that failed to quell violence, but the dominant Shiite United Iraqi Alliance that includes Jaafari's Dawa Party staged a show of force with a rally that drew thousands in eastern Baghdad.
Red and green Shiite banners rippled in Sadr City as militants chanted slogans in support of the UIA, which includes the Dawa Party, the powerful Supreme Council for the Islamic Revolution and followers of radical cleric Moqtada al-Sadr.
Al-Qaeda's branch in Iraq and four other extremist groups warned people not to vote in a statement posted on the Internet.
"What is known as the political process is nothing but a devilish plot," said a statement signed by the Al-Taifa Mansura Army.
But another insurgent group, The Islamic Army in Iraq, broke ranks and called on its militants not to attack voting stations.
In Philadelphia, US President George W Bush estimated Monday that 30,000 Iraqis had been killed since the March 2003 invasion, in initial fighting and the subsequent insurgency.
The US State Department's coordinator on Iraq, James Jeffrey, predicted a high turnout and said pre-poll violence had dropped sharply in recent days.
The election for a 275-member parliament follows a US-led military campaign drive to oust Saddam in April 2003, two transitional governments and the adoption of a constitution in October.
Electoral officials will allow some candidates with suspected links to
Saddam's former party to stand, but warned they could still be disqualified.
The council responsible for purging the state of Saddam loyalists urged voters however not to elect roughly 130 Baathist candidates standing in the election among a total 7,000.
Violence flares
Security measures, similar to those enforced at two earlier polls this year, are planned to limit bloodshed and bombings during Thursday's main event.
But violence flared in Baghdad before the clampdown took full effect, killing at least seven people and wounding at least 37.
Two US soldiers also died in separate attacks south of the capital and in the volatile western Sunni province of Al-Anbar.
Iraq's defence minister rejected a proposal for a Sunni army division in the provincial capital Ramadi, even as the government sought to draw Sunni Arabs into the political process.
Saadun al-Dulaimi heard about the plan for a Sunni division from a council of elders who suggested it be entirely recruited from Al Anbar and assume security responsibilities in the region.
"This is the first time I've heard of such an initiative, these (discussions) are not binding," Mr Dulaimi replied after the proposal was made in a meeting attended by the coalition force commander, US General George Casey.
Iraqis surveyed
A joint survey by the television networks BBC, ABC America and Time Magazine, has found that a majority of Iraqis is opposed to the presence of US forces in their country and have a negative view of the US-led invasion.
However a large percentage is nonetheless optimistic about the future.
The poll showed that 65 percent of the 1,711 Iraqis questioned are opposed to the presence of US troops in Iraq and nearly half would like to see American forces leave soon.
However, 76 percent expressed confidence that this week's elections in Iraq will produce a stable government and 42 percent are very confident of it.
The poll also showed that 59 percent believe US and coalition forces have done a bad job in the country since the 2003 invasion against 36 percent who feel they have done a good job.
The survey results said that while 71 percent of those questioned felt that their own life had improved economically since the invasion, 44 percent felt that could not be said for the country overall.
In addition, 57 percent said that their main national priority over the next 12 months was security, while 10 percent said it was getting US forces out of Iraq and nine percent said it was rebuilding infrastructure.
The poll was conducted throughout the country from early October through mid-November.