Nearly 70 people have been killed by a bomb blast in the eastern Sadr City area of Baghdad, according to Iraqi officials.
Police said the device went off in a market place in the predominantly Shia area of the Iraqi capital.
More than 130 people were also reported to have been injured in the blast, one of the worst in Iraq this year.
It comes less than a week before American soldiers pull out of all Iraqi cities, a move the United States said would not be affected by a recent surge in violence, the BBC reports.
An interior ministry said the blast struck the market place about 7.30pm on Wednesday.
The official said the bomb was hidden underneath a motorised cart carrying vegetables for sale.
Market stalls were set on fire and an official said people standing 600m away were hit by shrapnel.
Combat operations across Iraq are due to end by September 2010 and all US troops will be out of the country by the end of 2011.
White House spokesman Robert Gibbs said the top US commander in the country, Gen Ray Odierno, had told President Barack Obama that he felt "confident in moving forward" with the withdrawal.
The attacks have been attributed to attempts by Sunni militants to provoke sectarian tensions.
On Monday, at least 29 people were killed in attacks in Baghdad and elsewhere.