BAGHDAD - A U.S.-sponsored Iraqi court on Sunday found former dictator Saddam Hussein guilty of crimes against humanity and sentenced Hussein to death by hanging.

Upon hearing his verdict, a visibly shaken Saddam called out "Allahu Akbar!" (God is Greatest) and "Long live the nation!"

The Iraqi government imposed curfews ahead of the final hearing and has cancelled army leave, fearing the historic trial verdict might trigger fresh sectarian bloodletting.

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Two bailiffs lifted Saddam to his feet afer he initially refused Chief Judge Raouf Adbul-Rahman's order to rise.

Saddam was found guilty of involvement in a genocide of 148 Kurds in 1982 following an assassination attempt against him.

Saddam's half brother, Barzan Ibrahim, and the one-time head of Iraq's former Revolutionary Court, Awad Hamed al-Bandar, were also sentenced to death.

Former vice president Taha Yassin Ramadan was sentenced to life in prison, while former Baath Party official Mohammed Azawi Ali was acquitted and immediately freed for lack of evidence. Three other party officials, including a father and son, were sentenced to up to 15 years in prison for torture and premeditated murder.

As the proceedings finished, clashes broke out between police and gunmen in north Baghdad's Azamiyah district, which is dominated by hardliners from among Saddam's fellow Sunni sect. In contrast, celebratory gunfire rang out in many other parts of the city.

The verdicts mark a political watershed that authorities fear could spark renewed bloodshed among Iraqis who endured more than two decades of brutal authoritarian rule under the convicted dictator.

Saddam's lawyers said before the verdict that the ousted president had told them he was ready to die "with honor and with no fear".

A death sentence or life imprisonment generates, however, an automatic appeal. This would delay any execution by months at least. Saddam, with rhetoric typical of his defense over the past year, has told the court he wants to face a military firing squad, not the hangman.

Even with the verdict imminent, Saddam's lawyers and some Sunni politicians had called for the court proceedings to be suspended.

"It has become clear to the Iraqi people and the whole world that this court is politicized 100 percent," Salih al-Mutlaq, head of the second largest Sunni parliamentarian block, told the Doha-based al-Jazeera satellite channel.

As Baghdad went into lockdown overnight, mortars slammed into the mainly Sunni district of Adhamiya, killing seven people and wounding 20, an Interior Ministry source said.

Saddam's lawyers told Reuters they chatted with him for more than three hours on Saturday, saying he was in high spirits and talked about mounting U.S. military losses and the insurgency.

"I will die with honor and with no fear, with pride for my country and my Arab nation but the U.S. occupiers will leave in humiliation and defeat," they quoted Saddam as saying.

"They will see rivers of blood for years to come. It will dwarf Vietnam," the lawyers quoted him as saying.

Prime Minister Nuri al-Maliki, who called for Saddam to be executed quickly, said he should get "what he deserves" for killing, torturing or jailing hundreds of Shi'ite Muslims after gunmen from Maliki's Shi'ite Dawa party tried to kill Saddam in the town of Dujail in 1982.

"If he is guilty, he deserves the death penalty," Ali Hassan, who testified against Saddam last year, told Reuters in Dujail. "The law must take its course."

A full text of the five judges' rulings, running to hundreds of pages, will be issued in the coming days, court sources said.

A conviction may be a timely lift for President George W. Bush before Tuesday's U.S. elections, when Republicans could lose control of Congress partly in a backlash over the Iraq war.

Largest war crimes trial since Nuremberg
The killing of three defense counsel, fearful witnesses and a chief judge who quit over government interference are only part of the events that tarnished the credibility of one of the great experiments in the law of war crimes since Nazi leaders were tried at Nuremberg 60 years ago.

After Saddam's capture three years ago, the Americans resisted calls for the case to be handed over to an international court such as those for Rwanda and the former Yugoslavia. Instead, they said, Iraqis should try Saddam themselves and in the process exorcise 30 years of fear.

Funded, trained and heavily guided at times by American lawyers, the special court has so far launched two trials -- the second a genocide prosecution over the deaths of 180,000 Kurds in 1988 -- and has up to a dozen other cases in the works.

Prosecutors have sought death sentences for Saddam, his half-brother and former intelligence chief Barzan al-Tikriti, vice president Taha Yassin Ramadan and judge Awad al-Bander. Three minor Baath party officials from Dujail also face sentencing while a fourth has been recommended for acquittal.