* Insurgents have stepped up violence in Iraq
* Factions struggling over how to share power
* Shi'ite PM has faced mass Sunni protests
KIRKUK, Iraq, Feb 22 (Reuters) - Masked gunmen wearing Iraqi army uniforms shot dead seven members of a government-backed militia on Friday in a northern town, in an apparent attempt to provoke unrest against Shi'ite Prime Minister Nuri al-Maliki.
No group claimed responsibility, but Sunni insurgents have increased their attacks over the past two months, a year after U.S. troops pulled out of the country, where Shi'ite, Sunni and ethnic Kurdish factions still struggle over how to share power.
Riding motorbikes, the gunmen dragged "Sahwa" fighters from their beds in a caravan and killed seven of them, seriously wounding an eighth near the town of Tuz Khurmato, 170 km (105 miles) north of Baghdad.
"The seven dead bodies were in the same place. Each had a deadly shot to the head, but the eighth one had several shots in the back," said a policeman at the scene who declined to be named.
The Sahwa or "Sons of Iraq" are former Sunni insurgents who rebelled against al Qaeda in the Sunni heartland province of Anbar at the height of the Iraq war and helped American troops turn the tide of the conflict.
Al Qaeda's affiliate, Islamic State of Iraq, has often targeted Sahwa, pledging to take back ground lost to American and U.S. forces.
The prime minister has been struggling to quell mass protests by Sunni Muslims, mainly in Anbar, against what they see as the marginalisation of their sect since the fall of Saddam Hussein and the rise of Iraq's Shi'ite majority through the ballot box.
The attack was at least the second of its kind so far this month. Earlier in February a suicide bomber targeting Sahwa fighters collecting their salaries killed at least 22 people.
While violence has fallen from the height of the sectarian slaughter that killed tens of thousands in 2006-2007, insurgents have carried out at least one major attack a month since U.S. forces left in December 2011. Bombings and killings still happen daily, often aimed at Shi'ite areas and local security forces.
Sunni unrest and renewed violence are compounding fears the war in neighbouring Syria - where Sunni rebels are battling President Bashar al-Assad, an ally of Shi'ite Iran - could undermine Iraq's own delicate sectarian and ethnic balance.
Tuz Khurmato, where Friday's shootings took place, is located in the "disputed areas" - a thick band of territory over which both the Iraqi central government and the autonomous Kurdish region in the north claim jurisdiction. (Reporting by Omar Mohammed and Mustafa Mahmoud in Kirkuk, writing by Suadad al-Salhy; Editing by Isabel Coles and Pravin Char)