The brutal killing in Baghdad apparently stems from a days-old dispute in which the teen -- identified as 17-year-old Haitham Ali Ismael -- repeatedly ordered a group of protesters gathered on the street near his home to move but they refused, according to Maj. Gen. Abdul Karim Khalaf, a spokesman for the Iraqi Armed Forces.
The argument took a violent turn on Thursday morning when the teen climbed up onto the roof of his small house and fired a pistol into the air above the crowd, Khalaf told ABC News.
The protesters, apparently believing the boy had shot and killed someone, threw Molotov cocktails at his house, setting it on fire. They then stormed the home and stabbed the teen multiple times before tearing off his clothes and dragging him out on to the streets, according to Khalaf.
The mob tied rope around the teen's feet and hung his bloodied, lifeless body from a traffic light in Al Wathba Square in central Baghdad, Khalaf said.
"Security forces have not intervened yet and are awaiting a decision by the competent authorities for fear of collision and friction with the undisciplined elements between these groups," Khalaf said.
The civil unrest in Baghdad and other Iraqi cities began in October, fueled by anger over rampant corruption, inadequate public services, soaring unemployment and Iran's interference in the country's affairs. Baghdad's Tahrir Square, just a couple miles from Al Wathba Square, has become the heart of the anti-government uprising.
"A decision must be taken to enter the armed forces in the vicinity of Tahrir Square to end the tragic situation that is taking place there under the pretext of demonstrating," Khalaf said.
Muqtada al-Sadr, an influential Shia cleric, has threatened to pull his supporters from Tahrir Square unless the "terrorists" who killed the boy are found and brought to justice within 48 hours.
Organizers of the months-long protest movement have distanced themselves from Thursday's lynching, saying those involved were not their own. They claim, however, that the teen was under the influence of drugs when he fired on demonstrators and that Iraqi authorities stood by as "a number of them" were killed.
"What happened today in Al Wathba Square is a crime condemned by demonstrators and condemned by humanity and religions and punishable by law," the organizers told ABC News.
The U.S. Embassy in Baghdad issued a statement Thursday condemning the violence and expressing concern over the "disturbing accounts of citizens, demonstrators and activists being threatened, kidnapped, or killed."
"These actions should not be tolerated, and the government of Iraq cannot allow these lawless criminal events to continue without action," the embassy said. "Today's events in Al-Wathba Square were horrific. As we have said before and will say again, the U.S. government supports Iraq's desire for security, stability and sovereignty -- which cannot happen until kidnappings and violence cease."
Reporting by Bader Katy in Baghdad, Iraq. Writing by Morgan Winsor in London, England.