At least 35 people have been killed in a car bomb attack on a kerosene tanker in the mainly Shia district of Sadr City in the Iraqi capital, Baghdad.
The death toll continues to rise unabated
Nine severed heads were also found in the city of Tikrit as violence swept across the country.
The BBC's Ian Pannell in Baghdad said most bombing victims were women queuing for cooking fuel to use throughout the holy Muslim month of Ramadan.
US officials have predicted an increase in violence throughout Ramadan.
Meanwhile, Iraqi officials say they have captured a leader of violent Sunni militant group, Ansar al-Sunna.
The bomb attack is one of the deadliest in Iraq in recent weeks.
At least another 37 people were injured in the bomb blast, and Iraqi police Colonel Saad Abdul-Sada said that the death toll could rise further.
At the scene of the attack people used blankets as makeshift stretchers to rush the injured to ambulances, which then ferried them to the Al Sadr general hospital.
Most victims were women queuing for cooking fuel for Ramadan
One witness spoke of their horror at the attack: "What did those people do? The poor civilians were trying to get kerosene and gasoline. All of them were women and children."
The attack took place in Sadr city, a mainly Shia neighbourhood which is home to the notorious armed militia group, the Mehdi army.
No-one has claimed responsibility, but our correspondent says it is most likely another sectarian attack. The area has witnessed an increasingly violent tit-for-tat conflict between Shia and Sunni Muslims.
Adding to the day's grim events, the severed heads of nine murdered Iraqi police and soldiers were reported to have been found north of the capital.
BBC correspondent Jim Muir said it is believed the heads belong to Iraqi security forces abducted by insurgents.
In other developments:
- A US soldier was killed in a roadside bomb attack in northern Baghdad
- A Danish serviceman was killed and eight others injured in a roadside bomb attack near the southern city of Basra.
Sunnis began their month of Ramadan daytime fasting on Saturday, while Shias are set to follow on Sunday.
In recent years there has been a spike in violence in Iraq throughout the holy month and US officials are predicting that it will be much the same this year.
The UN recently reported a rise in Iraq deaths, with almost 3,600 civilians killed in July and more than 3,000 in August this year.
In a separate development the Iraqi prime minister's office says US and Iraqi forces have captured Muntasir al-Jibouri, a senior member of Sunni militant group Ansar al-Sunna.
He was captured overnight, along with two colleagues, in the town of Muqdadiya, in Diyala province 80km (50 miles) north-east of Baghdad.
Ansar al-Sunna is one of the most violent groups involved in Iraq's Sunni insurgency, responsible for a number of suicide bombings, kidnappings and beheadings.
Among the attacks the group has claimed responsibility for is a December 2004 attack on a US military mess hall in Mosul in which 22 people died.
The group, which is believed to have links to al-Qaeda, has its origins in Ansar al-Islam, a radical group based in mountainous northern Iraq.