* Iraqis angry over pension payments for officials
* Police use teargas, water canon in southern city
BAGHDAD, Aug 31 (Reuters) - Hundreds of protesters took to the streets in Baghdad and central and southern Iraq on Saturday against generous pension payments to lawmakers in a county where many are still struggling to get jobs and basic services.
Police surrounded the rare demonstration in the capital and security forces armed with batons, teargas and water canon broke up one gathering in the southern city of Nassiriya, witnesses and security forces said.
The protests marked widespread anger at the monthly payments of thousands of dollars and other benefits to government and parliamentary officials.
Distracted by sectarian attacks and political feuding, the government has done little to improve education, housing and other infrastructure.
Crowds chanted "oil is for the people, not the thieves", and "no to squandering the wealth" in a square in the east of the capital.
Security forces had closed most bridges connecting the two sides of Baghdad since Friday evening and blocked demonstrators from reaching their planned protest sites. Security forces also stopped media covering the demonstrations.
In Nassiriya, 300 km (185 miles) southeast of Baghdad, riot police armed with batons wounded 11 people and detained ten, security sources and witnesses said.
Unemployment was officially estimated at 11 percent in 2011 but the International Monetary Fund has said actual levels are likely to be considerably higher, especially among young people.
Iraqi Prime Minister Nuri-al Maliki said he supported the protesters' demands and would work to "amend the salaries of high-profile officials," in a statement on his website.
"If Maliki supports our demands, why are his forces forbidding us from demonstrating?" protest organizer Ahmed al-Baghdadi told Reuters by telephone. He said three activists had been detained by police in Baghdad. (Reporting By Raheem Salman)