The violence is the latest since protests in Iraq reignited last week after a brief lull amid soaring tensions between Washington and Tehran following a U.S. drone strike that killed top Iranian general Qassem Soleimani in Baghdad earlier this month.
The tear gas and live rounds were fired near the city's Sinak Bridge and nearby Tayaran Square, which have been the scene of violence in recent days, medical and security officials said.
As smoke rose over the city from the tear gas, tuk-tuks ferried the injured to hospitals.
A security official said at least nine arrests have been made so far after the National Security Council authorized security forces to arrest demonstrators seen blocking main thoroughfares and roundabouts.
The U.N. envoy to Iraq, meanwhile, urged Iraqi political elites to resume pushing for reforms and for protests to remain peaceful.
"Any steps taken so far to address the people's concerns will remain hollow, if they are not completed," said Jeanine Hennis-Plasschaert in a statement issued by the U.N. "Violent suppression of peaceful protesters is intolerable and must be avoided at all costs. Nothing is more damaging than a climate of fear."
In the southern city of Nasiriyah, protesters blocked the highway linking the city to the southern oil-rich province of Basra. At least six protesters were wounded when an unknown gunmen fired at them from a speeding car, a medical official said. All officials spoke on condition of anonymity under regulations.
On Sunday, protesters in Baghdad and southern Iraq burned tires, blocking main streets. Clashes in Baghdad wounded at least 27 people. Iraqi activists gave the government a week's deadline to act on their demands for sweeping political reforms or said they would up the pressure with new demonstrations.
The uprising began on Oct. 1 when thousands of Iraqis took to the streets to decry rampant government corruption, poor public services and a scarcity of jobs. Protesters are demanding an end to Iraq's sectarian political system, alongside early elections and the stepping aside of its ruling elite.
Since the protests first erupted in October, at least 500 have died under fire from security forces.