Hundreds, if not thousands, of protesters walked and ran freely around the Green Zone, a normally off-limits area housing government buildings and foreign embassies, according to images broadcast on state-run news channel Al-Iraqiya.
Protesters again stormed a monument inside the Green Zone, where Saddam's swords are featured despite efforts by the Iraqi security forces to stop them.
Several people were injured in the confrontations, including two Iraqi security forces, according to Kurdish television network Rudaw.
The chaos erupted hours before Iraqi party leaders were due to arrive for meetings in the Presidential Palace within the Green Zone.
Despite ongoing confrontations Sunday morning, Prime Minister Haider al-Abadi has arrived at the palace for the talks, Rudaw said.
Inside the Parliament building, they waved Iraqi flags, ransacked rooms, chanted, gestured for cameras and sat at lawmakers' desks.
"The cowards ran away," they chanted, referring to Parliament members who'd gathered there earlier. The Prime Minister
had been scheduled to announce a new Cabinet on Saturday but didn't because of lack of a quorum.
No large-scale violence has been reported, although Hoshiar Abdullah, a Kurdish member of Parliament, told Rudaw that the deputy speaker and five other Kurdish lawmakers were trapped inside the building and had been attacked by protesters who also smashed their cars.
Iraqi security forces used stun grenades and tear gas to disperse protesters who tried to break into the Green Zone from the southern gate, the entrance closest to the U.S. Embassy.
Protesters retire to Celebration Square
Iraqi security forces later took control of the Green Zone, Saad Maan, the spokesman for Baghdad's Operations Command, told Al-Iraqiya. A state of emergency was declared and all city entrances were closed.
Amateur video posted on YouTube
purported to show the prime minister touring the area on foot with military guard as protesters tried to talk with him.
"We assure our people that the situation in Baghdad under the control of the security forces," he said in a statement. "I call on the protesters to return to the designated areas for demonstration and keep it peaceful and not to encroach upon the public and private property and state institutions, which are the property of all Iraqis."
After night fell, the protesters moved inside the Green Zone to Celebration Square, the wide plaza with the statue of giant crossed swords.
They hailed Shiite cleric Muqtada al-Sadr, who sparked the protests with a fiery speech on Saturday in the city of Najaf, about 100 miles south of the capital.
Shiite cleric has criticized government
Al-Sadr has called for a government made up of technocrats
, rather than political cronies, and for corrupt politicians to be held accountable.
In his speech on Saturday, al-Sadr also said he stands with the people, boycotting all politicians except "those who seek reform with full transparency. I stand waiting for the major popular uprising and the major popular revolution to stop corruptors."
He's been railing against the Iraqi government for months, warning that his supporters would enter the Green Zone if the government didn't take steps to deal with the economic crisis and make other reforms.
Al-Abadi, the prime minister, is working to bridge sectarian divides, but his government has been plagued in recent months by protests and opposition from predecessor Nuri al-Maliki, as well as Sadr.
Shiite lawmaker Ammar Taama -- also the head of the Shiite Fadhila faction in Parliament -- was reportedly beaten by some protesters, possibly due to his past comments criticizing Sadr.
It was the first time the Green Zone has been penetrated since 2003, when the area was delineated after U.S. troops invaded Iraq and forced out then-President Saddam Hussein.
The zone was strongly secured while U.S. troops were in charge of Iraq's security, and while the occasional mortar or grenade was lobbed into it and a handful of suicide attackers slipped inside, no large-scale protests have managed to get through.
But now, many Iraqi security forces and Shiite militias have been diverted to fight the terror group ISIS elsewhere in the country, and the security situation in the capital may not be as strong.
Protesters urged to remain calm
U.S. State Department spokesman Mark Toner issued this statement: "Under the Vienna Convention, all diplomatic missions are protected by the host country's security forces. We have full confidence that the Iraqi Security Forces will meet its obligation."
The U.S. Embassy tweeted that reports that officials from the Iraqi government or another party are inside the embassy were not true.
Rumors flew that some politicians were trying to flee the protests, but an official at the Baghdad airport told Al-Iraqiya no officials were trying to leave the country.
A statement on the website of Iraqi President Fuad Masum called on protesters to remain calm, "abide by the law, not to attack any lawmaker, government employees, public or private properties and to evacuate the building."
According to Iraq's Defense Ministry, Defense Minister Khalid al-Obeidi has contacted military commanders in all sectors, urging them to be cautious and vigilant and not allow terrorist elements to exploit the situation.
Security had already been heightened in Baghdad due to a planned Shiite pilgrimage to Kadumiya on Monday and Tuesday.
Biden visited Thursday
The United Nations Assistance Mission for Iraq (UNAMI) issued a statement saying it was "gravely concerned" by the protests and "the storming of the Council of Representatives premises by demonstrators after they entered the International Zone.
U.S. Vice President Joe Biden made a brief, unannounced visit to Baghdad
on Thursday for meetings with political leaders to encourage national unity and steps to take to help Iraq's economic woes.
"The more the political system in Baghdad is consumed with everybody keeping their job, or figuring out how to rearrange the government, the more difficult it is for everybody to be on the same page as it relates to the next step in the counter-ISIL campaign," said one senior administration official traveling with Biden. "The bigger danger you have to hedge against is that."
Deadly bombing east of Baghdad
Earlier Saturday, at least 24 people were killed and as many as 38 wounded when a car bomb exploded at a busy livestock market in Nahrawan, east of Baghdad, police said.
ISIS claimed responsibility for the bomb through its media group, Amaq Agency.
The Amaq Agency said "around 100" people had been either killed or injured in the blast. The bomb targeted Shiites, the agency said. ISIS is a Sunni group.
Sectarian violence has been rife in the country since the U.S, invasion toppled Saddam from power, and it has pitted Sunnis and Shias against each another, with the Kurds gaining a measure of autonomy in the north of the country.