More than a thousand delegates at a national conference in Iraq are meeting to choose their interim national assembly, as mortar bombs pound the area around the conference site. One landed at a nearby bus station Sunday, killing at least one person and wounding at least 17.

Explosions shook the building at regular intervals in the afternoon, and conference organizers shouted for people to stay away from the windows. Despite the constant reminders of Iraq's instability, most of the delegates carried on with their business relatively unfazed.

There were a few fireworks inside the conference center, as well. After the opening speeches, a group of 20 to 30 Shia Muslim leaders, believed to be allied with radical cleric Moqtada al-Sadr, stood and demanded their turn at the microphone.

They shouted, "Mr. President, part of the democratic process is listening to us!" Then they demanded an immediate end to all military operations in the holy city of Najaf, threatening to walk out of the conference, otherwise.

Hundreds of people are believed to have died in Najaf in battles between Mr. al-Sadr's militia and U.S. troops. Peace talks collapsed on the eve of the conference, and fighting resumed as the delegates assembled in Baghdad. The violence in Najaf has angered many in Iraq, even among those who do not support Mr. al-Sadr, because the fighting centered around one of the holiest sites in Shia Islam, the Shrine of Imam Ali.

Despite the continuing standoff in Najaf, organizers went ahead with the national conference, amid tight security. The government declared a daytime curfew in the neighborhoods near the conference center.

Interim Prime Minister Iyad Allawi told delegates their meeting is a first step on the road to opening what he called "the horizons of dialogue."

He said, "Your blessed presence here is a challenge to the forces of evil and tyranny that want to destroy this country."

Several key groups, including Mr. al-Sadr's and an influential Sunni Muslim group, have boycotted the conference, and some analysts have questioned whether it can truly achieve a national dialogue in their absence.

Without naming any names, Interim President Ghazi al-Yawer had pointed words for those who try to get their way through violence, instead of participation in the political process.

He said, "Although we can have different opinions, we shun those who would use violence to hijack the government." The president said, "Anyone who uses violence as their means will be working against the interests of the country."

The new United Nations representative in Iraq, Ashraf Jehangir Qazi, arrived in Baghdad just in time to participate in the conference, which the United Nations has helped organize. He had a hopeful message for the delegates.

"Yours is the land that gave birth to the first laws of society," he said. "Accordingly, Iraq is surely able to build a civil society that adheres to the rule of law and shuns political lawlessness and violence."

Mr. Qazi said the lack of security is "the most serious and immediate concern for Iraqis today." He said security measures alone cannot address the current strife and instability. He said it will require political consensus-building, rehabilitation and the rule of law.

The security issue is clearly on the minds of many delegates, who have decided to participate, despite the fear that insurgents could target them for attacks. One man from northern Iraq asked that his name not be used, but said he feels generally positive about the conference.

"Someone has to start democracy," said Mr. Qazi. "It's got to start at some point. And I think, whatever is being said about it, it's a political step in an important direction."

The delegates will elect 81 members of the interim National Council, which will monitor the activities of the interim government. Another 19 members have already been selected from the now-defunct Governing Council.

The National Council will not have legislative powers, but it will be able to veto appointments and decisions made by the Cabinet and prime minister. The national conference is expected to continue until Tuesday.