Eighty people were injured in the car bomb. The Associated Press news agency reported that the car bomber struck at around 12:00 local time (09:00 BST).
In other violence in Iraq at least three policemen died in a car bomb attack on Samarra, a small town north of Baghdad.
The destruction of Samarra's al-Askari mosque in February 2006 is widely held responsible for triggering the current wave of sectarian violence currently engulfing the Middle Eastern country.
US-led coalition forces have enjoyed signs of improvement in recent weeks but today's killings represent a step back. American forces said they found a 'torture room' in Baghdad's Sadr City district which also contained dozens of mortar bombs.
The explosives were detonated in a controlled blast, the US military said.
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