By Khalid al-Ansary

BAGHDAD (Reuters) - Iraq's cabinet approved a bill on Thursday to ban smoking in public places, but after years of bombings and kidnappings, chain-smoking Iraqis said they had more important things to worry about.

While violence has fallen sharply in Iraq in the last 18 months, insurgents still conduct major attacks on civilians. And with unemployment at nearly 20 percent, many Iraqis while away the day in cafes in a fog of fruity, aromatic waterpipe smoke.

Government spokesman Ali al-Dabbagh said the aim of the law was to reduce the number of smokers and to protect the public from smoke -- no small feat in a country where even hospital corridors are littered with cigarette butts.

"The government should worry about car bombs before worrying about the effects of smoking. It has to stop terrorism," said Ali Marham, a 35-year-old computer worker, smoking a waterpipe at a cafe in Baghdad's central Karrada district.

If ratified by parliament, the ban would include a prohibition on smoking in ministry buildings, airports, company buildings, theatres, cinemas and schools, Dabbagh said in a statement. "There will be designated areas for smoking."

It was not clear if the ban would apply to waterpipes.

Other Iraqis, roasting in the searing summer heat, said they would rather the government concentrate on improving the dilapidated electricity sector, which only supplies a few hours of power a day in many parts of the country.

"There are more important issues than this law, like fixing electricity, water shortages and reducing traffic," said Atheer Abdul-Wahab, a cafe worker who smokes 30 cigarettes a day. "I'm ready to give up smoking if the state provides a job for me."

Dabbagh said the law would ban smoking for minors, and set fines of up to 5 million dinars ($4,274) for any media that advertise cigarettes.

But the cheapness of cigarettes in Iraq -- a pack can cost as little as 25 cents -- makes smoking a tempting vice.

"One of the reasons for smoking is the difficult situation of living in the country. The state has to improve the psychology of the citizen by providing more places of entertainment. The timing of this law is not suitable," said Ali al-Tayeb, 30, owner of Karrada's Shisha (Waterpipe) Cafe.

Still some Iraqis, like cafe worker Haidar Imad, were in favor and said the law might just work. "I encourage the draft law, we can create miracles from the smallest things."

(Writing by Yara Bayoumy; editing by Robin Pomeroy)