Australian troops who served in Iraq were celebrated at a welcome home parade on Saturday that also marked the withdrawal of the country's combat operations in the war zone.

Prime Minister Kevin Rudd was among thousands of people who attended the parade through the northeastern city of Brisbane, which was partly closed down as some 700 troops in desert camouflage uniforms and the Australian army's distinctive "slouch" hats marched by.

"Today the Australian nation says thank you to you, the men and women of the Australian Defence Force, for your service in Iraq," Rudd told the troops.

Australia, one of just three countries to send troops to join the U.S.-led invasion of Iraq in 2003, this month ended combat duties for its soldiers. Rudd was elected last year on a promise to bring Australia's 500 combat troops home.

About 1,000 Australian troops remain in the Middle East in roles supporting the Iraq occupation. Australia also has about 1,000 troops in Afghanistan.

The troops who marched Saturday all served in southern Iraq, where the Australians held key security roles and undertook training of Iraqi forces. Just one Australian soldier died in Iraq, in an accidental shooting.

"These soldiers went to a troubled part of the world, suffered privations, but rolled their sleeves up and represented us in the great traditions of the ANZACS and the values of modern Australian society," said Brig. Steve Day, commander of the 7th Brigade that served in southern Iraq.

ANZACs were Australian and New Zealand forces who fought in a landmark battle at Gallipoli, Turkey, during World War I. While the British Commonwealth forces lost the battle, their conduct is a source of pride for Australians.

The parade was the first of three to welcome home troops who served in Iraq that will be held in cities with big military bases. The others will be held next Saturday in Darwin, and then on July 20 in Townsville.