By Ahmed Rasheed

BAGHDAD, Feb 2 (Reuters) - Angry Iraqis blamed the government on Saturday for deadly bombings in Baghdad that many fear herald a return to the heightened levels of violence previously quelled by months of improved security.

Baghdad residents were stunned by the scale of Friday's two suicide bombings in popular pet markets, which killed a total of 99 people and wounded almost 150.

"Yesterday's bombs killed hopes of Baghdad returning to normal life and here we are coming back to the swirl of violence," Abbas al-Khafaji, a 48-year-old government worker, said as he dragged nervously on a cigarette.

People had gathered there after being encouraged to venture out again after dramatic falls in attacks over the past eight months.

Khafaji was in central Baghdad's Karrada district, ringing his wife every few minutes to see if their daughter Hajir had returned home from school.

"I feel worried about her. After yesterday's bombing I'm afraid for my family," he said.

Like many, he blames Prime Minister Nuri al-Maliki's government for security lapses that led to the bombings, which the U.S. military have blamed on al Qaeda. He said the authorities must reconcile with insurgents to end the violence.

"The government has to admit that shaking hands with killers is the only way to spare the lives of innocent people," he said. "I hold the government responsible for yesterday's bombings, we have lost confidence in this government."

Basim Abdul-Ameer's brother was seriously wounded in Friday's worst bombing at the popular Ghazil pet market, which has been hit four times in the past 13 months.

"We voted for Maliki's government and now we demand that the government resigns and gives qualified people the chance to do a better job," said Abdul-Ameer, a 30-year-old teacher whose father was killed by a car bomb in Karrada last July.

"Iraq boasts a budget of tens of billions of dollars and yesterday I saw wounded people being piled into pick-up trucks to be taken to hospital. It's really shameful and I wish Maliki was standing there at this moment," he said.

On Feb. 14 last year, Maliki launched "Operation Imposing Law" in Baghdad, a last-ditch attempt to drag Iraq back from the brink of all-out civil war between majority Shi'ites and minority Sunni Arabs who were dominant under Saddam Hussein.

That operation was followed by wider offensives by U.S. and Iraqi forces across Iraq, including deployment of 30,000 extra U.S. troops by mid-June. Attacks across Iraq have fallen by 60 percent since then.

Baghdad and Washington hailed those operations as successes after they helped damp down sectarian violence.

"Two coordinated bombings proves the government's failure to maintain peace in Baghdad," Abdul-Ameer said.

Workers in the two markets nervously repaired damage to their stalls on Saturday, with blood stains and shrapnel marks still visible on nearby walls.

Roadblocks were set up at the main entrances to Ghazil after "Operation Imposing Law" began but there are many other ways in through a warren of side streets.

"The situation in the market is miserable," said bird seller Hamdi Mohammed, 44.

"I will not reopen my shop ... until the market is secured, surrounded by a fence, and the number of checkpoints increased."

Six-year-old Hussain Ra'eed Hussain went to the markets every Friday with his father but won't go there anymore.

"There are explosions, there is death," he said. (Writing by Paul Tait, Editing by Matthew Jones)

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