At least 48 people have been killed and more than 60 injured in an attack on a market in the town of Mahmoudiya south of Baghdad, Iraqi officials have said.
The market stalls were destroyed and produce charred by the attack
Mortars were fired into the open-air market before at least 20 gunmen opened fire on the panicking crowds.
Many women and children were among the casualties, while most of the victims were believed to be Shia Muslims.
The town, which has a mixed Shia and Sunni population, has been the scene of frequent bombings and shootings.
Local police sources in Mahmoudiya said the market was attacked with mortars, after which gunmen rampaged through it firing at shops and civilians.
Security officials in Baghdad said the explosions were caused by car bombs, but that account was contradicted by reports from the scene.
The Associated Press reported that three Iraqi soldiers had been killed at a checkpoint in the town prior to the attack on the market.
Correspondents say the attack sent shock waves through the town, with frantic relatives involved in tense confrontations with security forces at the local hospital.
"You are strong men only when you face us, but you let them do what they did to us," AP reported one local man shouting at the guards.
The attack has sent shock waves through the town
Speaking on Iraqi TV, Abu Ali al-Masoudi, head of Mahmoudiya's council, described the raid as a "Saddamist plot".
"They burned shops and the market and killed people who were eating their breakfast in restaurants and people going to work."
In Baghdad, MPs from Moqtadr Sadr's Islamist faction walked out of parliament, apparently suspecting the attack was targeting a Shia funeral procession.
Late on Sunday, at least 23 people were killed in a suicide bomb attack in a cafe in the northern Iraqi town of Tuz Khurmatu, 170km north of Baghdad.
Police said the cafe was close to a Shia mosque in an area populated by Turkmen.
There are tensions between the Turkmen and Kurdish populations but the motive for the attack was unclear.
In the past 24 hours, almost 100 Iraqi civilians have been killed in violence across the country.