The US Defence Department sets up a new media unit that will focus on getting the US message across online channels
Meanwhile, an Iraqi delegation has met a newly-formed group of Iraqi exiles in the Jordanian capital, Amman, to persuade them to return to Iraq for a reconciliation conference in November.
The exiles, who include former soldiers and members of Saddam Hussein's Baath Party, are said to have rejected the invitation, demanding that insurgents should be included in the talks.
Iraqi authorities said Monday's blast in Sadr City appeared to have been caused by a device concealed in a rubbish bin by the roadside.
"The bomb was hidden in a plastic bag. It's the third time that an attack has hit this place this year," a witness, Abu Zeinad, told the AFP news agency.
There was no immediate indication who was responsible but suspicion will fall on Sunni extremists, the BBC's Hugh Sykes in Baghdad says.
There have been several attacks like this before, killing dozens of casual labourers waiting for work, our correspondent says.
Sadr City, with its population of about three million, is a stronghold of Shia cleric Moqtada al-Sadr, who heads the Mehdi Army militia.
Meanwhile, US forces are continuing to operate roadblocks and patrols around Sadr City as they hunt for a kidnapped American soldier.
A raid carried out in the district on Friday triggered brief clashes with Mehdi Army militia members.
Reports suggest the abducted soldier is an Iraqi-American translator who broke US Army rules to marry a local woman.