At least six Iraqis have been killed in the Iraqi capital in a suicide car bomb attack near a hotel used by senior coalition officials and the Iraqi Governing Council (IGC).
The car was travelling at high speed
The car exploded after being fired on as it broke through a four-metre high security barrier into the Baghdad Hotel driveway.
Iraqi police chief Ahmad Ibrahim said the attack on a hotel filled with Americans and other foreigners was aimed at driving the occupying forces out of the country.
The US State Department condemned "this vicious act of terrorism" and vowed to co-operate with Iraqis to bring those responsible to justice.
The BBC's Jill McGivering says since the murder of Aqila al-Hashimi last month the safety of IGC members has become a major concern.
They are thought to have become a prime target for those loyal to Saddam Hussein who are using violence to undermine the coalition's authority.
US-led troops have continued to come under attack in Iraq since 1 May when President George Bush declared major hostilities over.
A huge plume of smoke rose above the city after the blast.
Witnesses described body parts lying in the street as
US troops flooded the area as helicopters hovered overhead.
"A car tried to negotiate its way in but had no proper credentials. When it didn't stop they [Iraqi police] opened fire to prevent it from penetrating," US army Colonel Peter Mansoor said.
"The driver ignited the bomb and there was an explosion 20 meters [yards] inside the checkpoint and 100 meters from the hotel," Colonel Mansoor said.
MAJOR BOMB ATTACKS
9 October: Suicide car bomb hits police station in the northeast Shia district Sadr City, killing at least 10
29 August: Car bomb at mosque near Najaf, 125 killed, including Shia Islam top cleric
19 August: UN headquarters, Baghdad - 23 killed, including Sergio Vieira de Mello, veteran official
7 August: Jordanian Embassy - at least 14 killed
He said that six Iraqis had died and 10 had been wounded. One coalition soldier had been slightly injured.
The blast caused extensive damage to buildings, but the hotel itself was not damaged.
"Maybe it was al-Qaeda or [Saddam Hussein's] Baath party," the Iraqi police chief told Reuters news agency.
"They thought if they did this the Americans would be afraid and leave Iraq," Ahmad Ibrahim said.
The US administrator in Iraq, Paul Bremer, condemned the latest attack as a "terrorist" act and warned it would not deflect from the coalition's achievements in Iraq.
In August, a massive bomb at the United Nations headquarters building killed 22 people, including the head of mission.
And last week, the headquarters of Iraqi police was also hit, killing at least 10 policemen.