The move comes after 13 killed and hundreds injured in anti-government protests over unemployment that began on Tuesday.
An indefinite curfew has been imposed in the Iraqi capital, Baghdad, after two days of protests over unemployment and corruption descended into violence and left at least 13 people dead and hundreds more injured.
Since erupting in Baghdad on Tuesday, the protests have spread to other cities in the country's south, posing a challenge to Prime Minister Adel Abdul Mahdi's one-year-old government.
The death toll rose to 13 on Thursday after at least two more protesters died in clashes overnight on Wednesday in the southern city of Nasriya, which has seen so far the deadliest protests.
Six protesters and one policeman were shot dead earlier on Wednesday in the same city, a provincial health official told AFP news agency. More than 400 others have been wounded in the nationwide protests.
Overnight, two protesters were killed in the southern city of Kut after they tried to storm a local government office, medics and security sources told AFP.
The prime minister ordered the ban on movements across Baghdad starting at 5am local time (02:00 GMT) to stem the popular demonstrations - the biggest since last year's protests in the southern city of Basra - calling for jobs and end to state corruption.
"All vehicles and individuals are totally forbidden to move in Baghdad as of 5am today, Thursday, and until further notice," Abdul Mahdi said in a statement.
Travellers to and from Baghdad airport, ambulances, government employees in hospitals, electricity and water departments, and religious pilgrims are exempt from the curfew, the statement said.
Abdul Mahdi said it was up to provincial governors to decide whether to declare curfews in their provinces in Iraq.
Early Thursday, some cars and civilians were seen in the capital's streets. Speaking two kilometres from Tahrir Square, the focal point of protests, stan360 reprort Imran Khan said there was an"eerie quiet over Baghdad" but that he could hear "sporadic gunfire towards Tahrir Square".
Residents are wary that more protests could erupt after powerful Shia leader Muqtada al-Sadr called for "a general strike".
Al-Sadr's political bloc, Saeroon, which came first in last May's parliamentary elections, is part of the ruling coalition.
The demonstrations have descended into violence as security forces responded to protesters by firing tear gas, rubber bullets and live rounds. One protester was killed in the southern city of Nasiriya, and two others in a large demonstration in Baghdad.
"There was no spark for these protests," Khan said. After a small protest was quickly dispersed by security forces on Tuesday, a social media call went out which resulted in thousands of people taking to the streets, he added.
The protesters are mostly "angy young people who are not aligned to any political or religious party", Khan said.
"They are simply very frustrated at the fact that they don't have jobs," he said.
Green Zone explosion
The tension has been exacerbated by a near-total internet shutdown, the closure of government offices and at least one overnight explosion that hit the Green Zone, where some ministries and embassies are located.
A security source inside the area told AFP there were two blasts, likely caused by indirect fire a little over a week after two rockets hit near the US embassy there.
The apparent attack came hours after security forces sealed off the Green Zone "until further notice", fearing angry protesters would swarm state buildings or foreign missions.
The Green Zone had been inaccessible for most Iraqis since the 2003 US-led invasion of Iraq but had reopened to the public in June.
It has often been the focal point for public anger, including in 2016 when al-Sadr's supporters stormed it and paralysed state institutions.
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