Iraqi Prime Minister Adel Abdul Mahdi declared on Friday that he will resign in the wake of the bloodiest day yet in two months of mass protests against social inequality, unemployment, the failure of basic public services and rampant corruption.

“I will submit to the esteemed parliament a formal letter requesting my resignation from the premiership,” he said. While the statement did not set a date for his departure, the parliament is set to convene an emergency session on Sunday to take up the matter of his replacement.

Abdul Mahdi’s announcement followed the massacre of protesters in two southern Iraqi cities and the capital of Baghdad. At least 62 were killed—most of them shot to death with live ammunition—between Wednesday night and Thursday night. The largest bloodbath was in the city of Nasiriyah, where at least 46 protesters died. Another 12 were killed in the Shia Muslim holy city of Najaf, and at least four were gunned down in Baghdad.

The latest killings bring the official death toll in the two months of protests to 408, with an estimated 15,000 wounded. The real toll is undoubtedly higher, given that the figures include only those reported by the police and the Iraqi Health Ministry.

This latest bloodbath was unleashed after the government ordered the Iraqi military command to establish “emergency cells” to “impose security and restore order” following Wednesday’s storming of the Iranian consulate in Najaf, a center for Shia religious leaders and site of shrines that are a major pilgrimage destination for Shia Muslims in Iran. While allowing the Iranian staff to flee the building, the anti-government demonstrators tore down the Iranian flag, hoisted an Iraqi one and then set the consulate ablaze.

The Iraqi Foreign Ministry condemned the attack on the consulate, charging that it had been carried out by “people outside of the genuine protesters” seeking to harm relations between Iraq and Iran. For its part, the Iranian Foreign Ministry blamed the arson attack on “destructive agents and aggressors.”

There are no doubt efforts by US imperialism and its allies in the region—Israel, Saudi Arabia and the Gulf oil sheikdoms—to exploit the mass upheavals that have gripped Iraq since the beginning of October for the purpose of weakening Iranian influence in the region. At the same time, however, there is genuine anger against the bourgeois-clerical government in Tehran for its support of the Iraqi government and the sectarian Shia parties which dominate it. Tehran reportedly brokered an agreement earlier this month between the major Iraqi parliamentary blocs to forestall a previous move to secure Abdul Mahdi’s resignation.

Abdul Mahdi’s vow to resign also came in direct response to a sermon by Iraq’s senior Shia Muslim religious authority, Ayatollah Ali al-Sistani, delivered Friday by his representative in Najaf. In it, he indicted the government for its “clear inability” to deal with the mounting unrest over the past two months, while stating that the use of deadly force against peaceful protesters was “forbidden.” At the same time, al-Sistani warned that “enemies and their apparatuses are trying to sow chaos and infighting to return the country to the age of dictatorship.”

“The parliament, from which this current government is drawn, is asked to consider its choice in this regard and act according to Iraq’s interest ... [to] preserve the blood of its children,” the sermon concluded.

The announcement by Abdul Mahdi acknowledged al-Sistani’s sermon and echoed its language. It called for the government to “act in the interests of Iraq: to preserve the blood of its people; and to avoid slipping into a cycle of violence, chaos and devastation.”

The day before, Muqtada al-Sadr, the politically influential Shia cleric who backs parliament’s largest bloc and was instrumental in bringing Mahdi’s coalition to power, had called for the prime minister’s immediate resignation, warning that if he stayed it would spell “the beginning of the end of Iraq” and a potential descent into violence on the level of Syria.

No doubt, another factor influencing the attempt to defuse the conflict through Abdul Mahdi’s resignation was the mobilization of armed members of southern Iraqi tribes who confronted security forces attacking the demonstrators.

Abdul Mahdi’s announcement was greeted with celebration in Baghdad’s Tahrir Square, the epicenter of the protest movement that has spread throughout much of the country’s predominantly Shia south and led to strikes by teachers and students as well as other sections of the Iraqi working class.

At the same time, however, many of the demonstrators stressed that the prime minister’s ouster did not begin to meet their demands for sweeping political, economic and social transformations.

Abdul Mahdi was chosen as the compromise candidate by the various sectarian parties that dominate Iraqi politics and defend the interests of the corrupt ruling oligarchy that emerged in the wake of the US invasion in 2003 and the overthrow of the government of Saddam Hussein. A political mediocrity, he went from being a Baathist to a member of the Stalinist Communist Party, to a follower of Iran’s Ayatollah Khomeini, until finally winding up as a minister in the puppet regime installed by the US military occupation in 2004.

Amidst the dancing and singing in response to the resignation announcement, a speaker on Tahrir Square urged the protesters not to leave. “We want to bring down the regime,” he said.

Dabdab, 28, told the Washington Post that Abdul Mahdi’s resignation was insufficient and that the prime minister should be tried for the mass murder and maiming of protesters. “We want to change everything: all these thieves and faces,” he said. “This resignation is only step one, but it’s not what we came for. We want our country back.”

“This step is not enough for most Iraqis, especially after so many people have died,” Zainab, 29, told Al Jazeera.

The bulk of the demonstrators who have poured into Iraq’s streets by the hundreds of thousands are drawn from a generation that has been formed by the horrors of the US war and occupation, which decimated Iraqi society.

The official unemployment rate among younger workers in Iraq is 25 percent, with the real figure undoubtedly substantially higher. Hundreds of thousands of youth, including many university graduates, attempt to enter the labor market each year to confront the impossibility of finding a job without political connections. The present mass protests were preceded by sit-ins by university graduates outside government ministries demanding employment. Youth make up some 60 percent of Iraq’s population.

According to World Bank figures, 7 million of Iraq’s 38 million people live below the poverty line, while 53 percent are vulnerable to food insecurity. At least two million Iraqis remain internally displaced. US militarism’s systematic destruction of infrastructure, including electricity, water and sanitation, along with the gutting of the country’s once advanced public health system, have led to a shocking decline in health and life expectancy, which stands at just 58.7 years for men and 62.9 years for women.

While Iraq’s oil production is surpassed only by that of Saudi Arabia and Russia, bringing in $1 trillion in revenues since 2005, this wealth has fattened the profits of major foreign energy transnationals while enriching their local agents and the corrupt bourgeois layer that controls the government in Baghdad. For the masses of Iraqis, living standards have only declined.

Initially, Abdul Mahdi dismissed the protesters’ demands for jobs, better living conditions and an end to corruption, proclaiming that there existed no “magic solution.” His subsequent attempt to pawn off a set of cosmetic reforms was met with overwhelming rejection by the people in the streets.

The Iraq protests have expressed the mass popular rejection of sectarian politics, which were promoted by the US occupation as part of a strategy of divide and rule. The center of the mass rebellion has been the predominantly Shia regions that the ruling Shia sectarian parties claim to represent. The revolt has made clear that the central issue in Iraq, as all over the world, is class, not religion, nationality or ethnicity.

The demands of the Iraqi masses, like those of workers who have taken to the streets by their millions from Chile to Lebanon, cannot be resolved outside of the overthrow of capitalism on a world scale.