Gunmen are reported to have killed at least 70 Sunni men in the north-western Iraqi border town of Talafar.
Talafar has been the focus of major US operations in the past
The deaths were in apparent reprisal for bombings in a Shia area on Tuesday, which left about 55 people dead.
Iraqi officials said the attack occurred in a district of the town where tensions have been rising between Shia, Sunni and Turkmen residents.
Elsewhere, two suicide trucks carrying chlorine were detonated near a compound in Fallujah, wounding 15 soldiers.
Talafar is now reported to be calm and under curfew after the violence.
An Iraqi army spokesman in Mosul, Lieutenant Colonel Mohammed Ahmed Salah, described the killings as a "reprisal act".
"A violent incident happened [on Tuesday] and a reprisal act happened in al-Wahada, which is in the south of the town, just after the bombings," he said, adding that an investigation has begun.
"Shia armed groups killed Sunni men inside their homes," the town's mayor Brigadier Najim al-Jubouri said.
Reports said the gunmen may have been off-duty Shia policemen.
The police had been the target of an angry demonstration by the families of those killed and injured in the earlier bombings.
The Iraqi army has deployed armoured vehicles and even banned police from moving, an army officer said.
Some of the culprits are reported to have been arrested, including a number of policemen.
Doctors at Talafar hospital said that 45 bodies of handcuffed and blindfolded men had been received from the neighbourhood overnight.
"They are lying in the grounds. We don't have enough space in the hospital. All of the victims were shot in the head," one said.
On Tuesday, insurgents blew up two trucks in the town.
At least 55 people were killed and 25 injured, police said. One bomb was hidden in a truck that arrived at a market loaded with food supplies, and was detonated by the driver.
In the past, Talafar has been the centrepiece of a drive by US forces to secure, hold and reconstruct troubled areas.
In a speech on 20 March last year, marking the third anniversary of the invasion of Iraq, President Bush spoke at length about Talafar, which he said had been effectively liberated from al-Qaeda control.
It followed a joint Iraqi-US operation to root out insurgents during 2005, after which the town was surrounded with sandbanks to try to control entry and exit.
A US statement following Wednesday's attack in Fallujah said numerous Iraqi soldiers and policemen were being treated for symptoms such as laboured breathing, skin irritation and vomiting.
It said the attack also involved mortar and small-arms fire.
The statement said Iraqi police had identified the first suicide attacker and fired on the truck, causing it to detonate before it reached a government compound.
Iraqi soldiers then opened fire on a second truck, which blew up near the entrance to the complex.
It was the eighth insurgent attack using chlorine since the end of January, when a suicide bomber driving a dump truck struck a quick-reaction force and Iraqi police in Ramadi, killing 16 people.