Four American soldiers have been killed in a suicide attack at a US checkpoint near the town of Najaf, American military officials have said.
Najaf has been the scene of intense fighting
A taxi, driven by a man in civilian clothes, drew up to the checkpoint and as the soldiers approached it exploded, they said.
It is the first suicide bombing targeted at American forces since the war in Iraq began.
The BBC's Jonathan Marcus, reporting from Central Command in Qatar, says it is a worrying development for US troops, who have had to face a gauntlet of fire from Iraqi irregulars - often in civilian dress and using civilian vehicles.
The soldiers killed were from the US Army's 1st Brigade, 3rd Infantry Division, US Captain Andrew Wallace said.
He said that when the driver stopped at the checkpoint, he indicated to the soldiers that he needed some help.
"As they approached the car...he set off the bomb," he said.
Iraqi television named the bomber as army officer Ali Jaafar Musa Hammadi al-Numani.
It said he wanted to "teach the invaders a lesson in the same manner as our Palestinian martyrdom fighters".
Iraqi leader Saddam Hussein was reported to have awarded Mr al-Numani two posthumous medals for his action.
Major-General Victor Renuart at US Central Command said they were concerned about any kind of what he termed "unconventional attack" on US forces and would be investigating.
He told reporters that Saturday's incident bore the hallmarks of a "terrorist" attack.
"These kind of actions are symbolic of an organisation that is getting a little bit desperate."
Prior to the military campaign, there were warnings of possible suicide attacks.
In mid-March, Iraqi Foreign Minister Naji Sabri told an Arabic television station that tens of thousands of Iraqi men and women were ready to be martyrs for any war against the American enemies.
"We are preparing ourselves as if war is happening in an hour. For months we've been preparing ourselves for this possibility," Mr Sabri told the al-Arabiya satellite channel.
Najaf is a small town on the Euphrates river, just some 120 kilometres (75 miles) south of Baghdad.
It has been the scene of intense fighting as US troops confront Iraqi forces defending the approaches to the Iraqi capital.
On Wednesday, US commanders said several hundred Iraqi troops had been killed when they tried to ambush the US 7th Cavalry between Najaf and Karbala.
The biggest suicide bombing against the US military was in Lebanon in 1983.
A truck packed with explosives drove into the US marine base at Beirut International Airport.
The attack killed 241 American soldiers, while a simultaneous bombing at a base for French soldiers in the city left 58 people dead.