The scene of the bomb blast in eastern Baghdad
Nearly 70 people have been killed by a bomb blast in the eastern Sadr City area of Baghdad, Iraqi officials say.
Police said the device went off in a market place in the predominantly Shia area of the Iraqi capital.
More than 130 people were also reported to have been injured in the blast, one of the worst in Iraq this year.
It comes less than a week before US soldiers pull out of all Iraqi cities, a move the US said would not be affected by a recent surge in violence.
An interior ministry official told the AFP news agency the blast struck the market place at about 1930 (1630 GMT).
The official said the bomb was hidden underneath a motorised cart carrying vegetables for sale.
"I heard a boom and saw a ball of fire," said Najim Ali, a 30-year-old father who was injured in the blast.
"I saw cars flying in the air because of the force of the explosion," he was quoted as saying by AFP.
Raad Latif, a local shop owner, said the scene after the blast was "horrific".
He said people ran to help the injured after hearing the explosion but were initially kept back as security forces tried to get emergency vehicles to the scene.
"After a while they came to their senses and allowed us to help as much as we could. The scene was horrific," he told Reuters.
Another witness told the Associated Press news agency he heard a sound like "unbelievable thunder" and was knocked to the ground by "a hurricane".
Market stalls were set on fire and an official told AP that people standing 600m away were hit by shrapnel.
Under an agreement with the Iraqi authorities, most of the 133,000 US troops in Iraq are due to leave the country's cities and towns and withdraw to military bases by 30 June.
Combat operations across Iraq are due to end by September 2010 and all US troops will be out of the country by the end of 2011.
White House spokesman Robert Gibbs said the top US commander in the country, Gen Ray Odierno, had told President Barack Obama that he felt "confident in moving forward" with the withdrawal.
"Gen Odierno has mentioned that we have seen violence greatly decrease even in the past many months from what it was," he said.
Mr Gibbs said Mr Obama had no plans to change the withdrawal arrangements.
The BBC's Jim Muir in Baghdad says the location of the latest blast was significant, as Sadr City has been struck often and provocatively in the past.
The attacks have been attributed to Sunni militants' attempts to provoke sectarian tensions.
US troops are due to withdraw from Iraqi cities by the end of June
But this tactic has failed since the Shia Mehdi militia, which used to retaliate, was disbanded last year, says our correspondent, and the attacks now only succeed in killing civilians.
The attacks are the latest in a violent week in Iraq.
On Monday, at least 29 people were killed in attacks in Baghdad and elsewhere.
Three people, including a four-year-old child, were killed in the Shaab district of north Baghdad, while a car bomb killed five people in the capital's central Karrada district.
In the largest attack of the year, more than 70 people died in a truck bombing in Kirkuk on Saturday.
But Iraq's Prime Minister Nouri Maliki has said the violence will not delay the withdrawal which, he said, would ultimately be a triumph for the country.
He urged Iraqis: "Don't lose heart if a breach of security occurs here or there."