The early voting started ahead of Saturday's main polling day to try to avoid the security, logistical and electoral fraud problems of four years ago, when all eligible Iraqis had to vote on the same day.
About 614,000 police, soldiers, hospital patients and prisoners were eligible to cast ballots at 1,672 established voting centres that opened at 7am (0400 GMT) and will close at 5pm.
"At seven in the morning voting began that included army, police, patients and detainees," Hassan al-Waeli, chief of the electoral commission in Diwaniyah province told AFP.
"There were around 20,000 voters at 12 of our polling centres," he said.
The elections are seen by Washington and Baghdad as a crucial test of Iraq's stability in the face of simmering unrest as US troops prepare to accelerate their plan to withdraw from Iraq by 2011.
Security was especially tight in the capital, with hundreds of armed soldiers and police guarding polling stations as part of a sweeping plan to prevent the kind of violence that plagued the vote in 2005.
Adnan Jaafar, an army lieutenant was among those casting ballots.
"I'm happy because the elections are being held democratically and without pressure," he said, adding that he had voted for Prime Minister Nuri al-Maliki's State of Law coalition.
In Ramadi, the capital of the Sunni province of Al-Anbar, which boycotted the elections in 2005, a large number of police and soldiers went to the polling stations, an AFP reporter witnessed.
Only 3,775 people voted in Anbar in 2005, less than one per cent of the electorate. Sunni Arabs across Iraq are now expected to contest the ballot in large numbers to reverse the political imbalance that resulted from their near nationwide boycott four years ago.
That absence allowed Shiite and Kurdish parties to take control, which bred resentment among Sunnis and was partly to blame for a violent insurgency that cost tens of thousands of lives.
As voting started, a study by an international monitoring group that studies conflict-hit countries emphasised the importance of the polls.
"Despite likely shortcomings, the elections may begin to redress some of the most severe problems associated with the 2005 vote, assuring fairer representation of all segments of the population," said Robert Malley, Middle East and North Africa programme director of the International Crisis Group.
Voting in the oil-rich province of Basra was not free of incident. A fight broke out between a group of journalists and guards at a prison ballot centre.
"When we turned our cameras on they suddenly said the filming is over. We told them we are here to work but they didn't care and they started pushing us and punching and kicking us," cameraman Faisal Sachet told AFP.
"They took my camera and destroyed it," he said, adding that two other journalists had their camera equipment broken.
With the help of the United Nations, Iraq is holding the elections in 14 of its 18 provinces. Some 15 million citizens are being called to the polls to elect among more than 14,000 officials for 440 seats.
Iraq's borders will be closed on the eve of Saturday's polling, while transport bans and night-time curfews will also be put in place.
The provincial councils are responsible for nominating governors who lead the administration, finance and reconstruction projects in their areas, while security forces remain under Baghdad's control.
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