By Alastair Macdonald

BAGHDAD, Nov 6 (Reuters) - Five U.S. soldiers were killed and Baghdad was under curfew for a second day on Monday as the Iraqi government braced for any insurgent backlash against the court ruling that Saddam Hussein should hang.

Facing reverses in Tuesday's U.S. congressional elections because of disillusion with his venture in Iraq, President George W. Bush hailed Sunday's verdict from the U.S.-sponsored Iraqi High Tribunal as a vindication.

"My decision to remove Saddam Hussein was the right decision and the world is better off for it," he said while campaigning.

He called the judgment "a milestone in the Iraqi people's effort to replace the rule of a tyrant with the rule of law".

But his Republican party's Democratic opponents accused Bush of leaving U.S. troops stuck in the middle of mounting sectarian violence between Saddam's Sunni Arab minority and the Shi'ite Muslims who dominate Iraq's fledgling democratic institutions.

"The Iraqis have traded a dictator for chaos. Neither option is acceptable, especially when it is our troops who are caught in the middle," said Senate Democratic leader Harry Reid.

U.S. officials denied suggestions that the verdict, whose full written version will not be available for several days, was delivered in haste deliberately to help the Republican campaign. Bush spokesman Tony Snow called it "absolutely preposterous".

Heavy curfews in Baghdad and other areas of mixed population appeared to keep down violence on Sunday after the judge told the 69-year-old former president he should be "hanged until dead" for crimes against humanity -- killing, torturing and jailing hundreds of Shi'ites from the town of Dujail.

About 200 Saddam supporters demonstrated in Falluja, in western Iraq, chanting old Baath party slogans such as "We will give our blood for you." Mosul in northern Iraq also saw demonstrations, as did Samarra, north of Baghdad.

An automatic appeal means no execution is likely until next year at the earliest. Ethnic Kurds, for whose genocide complaint Saddam is due back in court on Tuesday, are still keen to have their own day of judgment for the fallen strongman.

Defence attorneys said they saw little hope from an appeal in the coming months and dismissed it as "victor's justice".

Early on Monday, Reuters reporters heard several mortar rounds slam into areas around Baghdad's Green Zone, the heavily fortified government compound that was once Saddam's palace complex and now houses the courthouse where he has been tried.

A government source said the curfew, an increasingly common security measure, was extended indefinitely: "Better more curfew than more bombings," the source told Reuters.

AMERICANS KILLED

In Baquba, a violent city with a mixed population just northeast of Baghdad, police put the final casualty toll at two dead and six wounded among pro-Saddam demonstrators when police and Iraqi troops opened fire on them after Sunday's ruling.

In Shi'ite areas, there was rejoicing in the streets after the verdict. Unusual rain in Baghdad dampened the mood on Monday. There was little movement and no newspapers available.

Two marines and a soldier were killed on Saturday and Sunday in western Anbar province, where U.S. forces are battling Sunni insurgents that include al Qaeda Islamists, the military said.

Two more soldiers died in a helicopter crash on Monday in Salahaddin province north of Baghdad. The military said there was no hostile fire in the area and it was investigaing.

That brought the total American military death toll since the invasion of March 2003 to 2,836. In October, 105 deaths were the highest monthly toll in nearly two years, drawing renewed attention to the losses in the middle of campaigning for elections that could cost the Republicans control of Congress.

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