One U.S. soldier was among those killed, and three U.S. soldiers were injured.
Chief UN spokesman Stephane Dujarric said there could be no justification for the deliberate targeting of civilians, especially children, whom he said are the hope for future.
White House spokesman Scott McClellan said Washington condemned the attack in the strongest possible terms.
"It shows that they have no regard for innocent human life, whether it's men, women, or children," McClellan said. "There is simply no excuse or justification for murdering innocent civilians, particularly children."
The new U.S. ambassador to Iraq, Zalmay Khalilzad, warned that foreign terrorists and insurgents linked to the Ba'ath Party of ousted dictator Saddam Hussein were trying to foment a civil war in Iraq.