Television crews captured gruesome images of dead Iraqis scattered on the road amid burning vehicles, as injured civilians cried out in shock and pain.
The attack was the deadliest in Iraq since deposed President Saddam Hussein was captured last month. Reports say the dead included two civilians working for the U.S. Department of Defense. Brigadier General Mark Kimmitt said there are indications that both were American citizens, but U.S. authorities are still trying to confirm the nationalities.
"I was passing when the explosion happened and people were thrown into the air and scattered, three here, and five there. The Americans pushed us away."
U.S. officials say most of those killed were Iraqi civilians employed inside the headquarters compound who were waiting to go through security checks at the start of the work day.
The chief U.S. civilian administrator for Iraq, L. Paul Bremer, said in a statement the attack was "clearly timed to claim the maximum number of civilian victims."
The security checkpoint -- nicknamed "Assassin's Gate" -- is beneath an enormous archway outside one of Hussein's former palaces.
It is guarded by U.S. soldiers who position themselves behind barbed wire and concrete blast walls.
Brigadier General Mark Hertling, deputy commander of the U.S. Army's 1st Armored Division, said the explosion was at the closest that a vehicle could get to the headquarters before being stopped for a security check. The main administrative headquarters building of the U.S.-led coalition in Iraq is about a kilometer beyond the gate.
Hertling said the concrete barriers absorbed most of the blast.
Some witnesses claimed they saw two vehicles explode as part of the attack and heard gunfire after the explosion. But U.S. Army Colonel Ralph Baker told journalists at the scene that those reports were not accurate.
"There was one explosion. One thousand pounds [about 450 kilograms of military grade explosives] in a white Toyota pickup truck. There was no exchange of gunfire as a result of this incident. Immediately after the bomb exploded, soldiers assumed a defensive posture and then immediately assisted Iraqi citizens by rendering First Aid [medical assistance] to them," Baker said.
Correspondents report seeing one large crater -- about 3 meters wide and 1 meter deep -- in the roadway outside of the security gate.
Baker's remarks also were supported by television footage recorded moments after the attack that captured the sound of bullets exploding inside of a half dozen cars that were ignited by the blast -- a sound that may have been mistaken for an exchange of gunfire by those close to the scene.
The road leading to the security checkpoint is one of Baghdad's major east-west arteries. Iraqi Wissam Muhammad Shaker says he was passing by the checkpoint when the truck bomb was detonated.
"I was passing when the explosion happened and people were thrown into the air and scattered, three here, and five there. The Americans pushed us away. I think that all the dead people were workers [employed inside the headquarters compound]," Shaker said.
The attack comes a day after the U.S. military released details of its plan to reduce the number of U.S. troops in Iraq from 130,000 to 105,000 within four to six months.
The military also plans to replace heavy weaponry with high-tech, mobile fighting equipment in order to address the new tactics of insurgents, such as roadside bombs, vehicle bombs, and hit-and-run attacks.
Three U.S. soldiers were killed in a roadside bomb on 17 January that ripped through their Bradley armored personnel carrier, pushing the combat death toll for U.S. troops to more than 500 since the invasion of Iraq last March. More than 600 Iraqi police working together with the coalition forces also have been killed since the collapse of Hussein's regime last April.
U.S. officials say the number of attacks against coalition forces has declined since its peak in November 2003.