Protesters set fire to Sweden's embassy in the Iraqi capital Baghdad early Thursday, an AFP journalist said, ahead of a planned burning of a Quran in Sweden.

Swedish authorities approved an assembly to be held later Thursday outside the Iraqi embassy in Stockholm, where organizers plan to burn a copy of the Quran as well as an Iraqi flag.

Iraqis have been angered by events in Sweden and Thursday's protest in Baghdad was organized by supporters of the turbulent religious leader Moqtada Sadr.

Iraqi riot police fired water cannon to disperse demonstrators away from the embassy while security forces armed with electric batons chased protesters, an AFP photographer on the scene said.

"We are mobilized today to denounce the burning of the Koran, which is all about love and faith," protester Hassan Ahmed told AFP. "We demand that the Swedish government and the Iraqi government stop this type of initiative."

Some protesters had raised copies of the Koran into the air, while others held portraits of Mohamed al-Sadr, an important religious cleric and the father of Moqtada Sadr.

Sweden's foreign ministry told AFP its embassy staff in Baghdad were "safe" following the incident.

"The Iraqi authorities are responsible for the protection of diplomatic missions and their staff", the ministry said, adding that attacks on embassies and diplomats "constitute a serious violation of the Vienna Convention".

Several trucks to extinguish the fire had arrived at the embassy, an AFP photographer said.