Thousands of members of Saddam Hussein's Baath Party have been banned from holding government jobs in Iraq.
The decree was issued a day after the new US civilian administrator, Paul Bremer, gave notice that the coalition powers occupying Iraq were determined to eradicate Saddam Hussein's former power base.
US forces in Iraq have also begun a new crackdown on lawlessness, which has ravaged the country since the overthrow of the former regime five weeks ago.
An official from the administrator's office said former Baathists were fuelling the crime wave and anti-American unrest in Iraq.
Call for an end to Iraq sanctions
The German Chancellor, Gerhard Schroeder and the US Secretary of State, Colin Powell, have called for a swift end to sanctions against Iraq.
Speaking after a meeting in Berlin, Mr Schroeder said sanctions no longer made sense and should be lifted as soon as possible.
The meeting came after relations between the two countries were strained by Germany's opposition to the invasion of Iraq.
Mr Powell told a news conference that the two sides had acknowledged their differences. 'We also talked about that which pulls us together,' he added.
