Police say the blast took place at a public square in the Al-Kadhimiyah district that was crowded with unemployed workers looking for jobs.
The explosion comes despite heightened security measures ahead of a major Shi'ite religious pilgrimage next week.
Iraqi state television quoted military spokesman Qassim al-Moussawi as announcing a partial ban on vehicles in Baghad ahead of the annual pilgrimage to Karbala. The spokesman said cars would be allowed, but that other forms of transport that could slip into smaller places, such as horse-drawn carts, motorcycles, and bicycles, will be banned until further notice.
Tens of thousands of pilgrims are expected to travel to the shrine city of Karbala, 80 kilometers south of Baghdad, early next week for the ceremony.
Such religious events have in the past been major targets for Al-Qaeda and Sunni Arab militants.
Presidential Call For Support
U.S. President George W. Bush, faced with growing calls to start withdrawing U.S. troops from Iraq, today asked Americans for patience and cited recent progress in Iraq.
In his weekly radio address today, Bush said "the success of the past couple of months have shown that conditions on the ground can change -- and they are changing."
Earlier this week, influential Republican Senator John Warner urged Bush to initiate a limited withdrawal of U.S. troops to show the Iraqi government that the U.S. commitment is not open-ended.
Meanwhile, a report by "The New York Times" says the number of detainees held by coalition forces in Iraq has grown by 50 percent under a troop increase known as "the surge" ordered by President Bush.
The daily, citing unnamed U.S. military officers, said the inmate population had grown to 24,500 from 16,000 in February.
The paper said the increase was due to U.S. forces operating in areas where they had not been present for some time. The report, which could not be independently confirmed, said 85 percent of the inmates are Sunni Arabs.
(AFP, NYT, Reuters)