Four US soldiers and seven Iraqi policemen were killed in separate attacks.

People were queuing in the town of Hilla for physical exams that permit them to work for the state or return to jobs lost after Saddam Hussein's regime fell when the explosives-laden car detonated, medical officials said.

Ambulances rushed the wounded to hospital in the mostly Shia town south of Baghdad as the wreckage of the vehicle smouldered in the street in a busy commercial district.

Local shopkeepers helped lift the dead and wounded from the debris.

The car was packed with several dozen kilos (pounds) of TNT and mortar shells to cause "the maximum number of victims", said police forensics chief Thamer Sultan.

"This criminal act targeted citizens who did not have any ties to the army and police and who have chosen to live in peace," said Walid Janabi, governor of Babil province of which Hilla is the capital.

Deputy governor Hassun Ali Hassun called it "the most odious crime ever committed in the town." The attackers had killed "innocent civilians who wanted jobs and shopkeepers trying to survive," he said.

A fire officer on the scene told AFP that his colleagues had found the hands of the suicide bomber attached to the steering wheel of the vehicle and a burned copy of the Koran in the wreckage.

The bombing was the worst attack in Iraq in a year.

Bomb attacks against Shias in Karbala and Baghdad killed more than 180 people in March 2004, while 105 people were killed in the northern city of Arbil in February 2004 in suicide bombings targeting Kurdish political parties.

The latest attack came as the Iraqi government was expected to shed light on the arrest of Saddam's half-brother amid speculation he was handed over by Syria where he had taken shelter.

In other violence, four US soldiers were killed in separate attacks, including one in Baghdad checkpoint, the US army said yesterday.

Two Iraqi soldiers were killed in a gun battle south of the restive city of Samarra, while an Iraqi soldier and translator died in a mortar attack near Dhuluiya, north of Baghdad, Iraqi security officials said.

A civilian was killed and two were wounded during a small arms attack on a police station in Baquba, the US military and Iraqi witnesses said.

The US military on Sunday announced the death in Iraq of three more of its soldiers, as insurgents shot dead five Iraqi policemen and at least five other people were killed in a bomb attack.

Police also found the bodies of eight people, one of them a headless woman with a note attached denouncing her as a spy, six of them Iraqi soldiers and the eighth a businessman who was working with US troops.

The latest unrest came as one of the groups blamed for many attacks mocked claims by Iraqi security chiefs that the noose was tightening around its leader Abu Musab al-Zarqawi, the country's most wanted man.

Two American soldiers were killed in a bomb and gunfire attack in Baghdad on Saturday, the US army said.

And a US marine was killed in action Saturday in the violence-plagued province of Babil, south of the capital, the military said.

On Sunday, a bomb ripped through the town hall in Hamma al-Alil, near the main northern city of Mosul, killing at least five people and wounding three, Iraqi security officials said.

According to the US military, there were eight dead and two wounded in the attack, 20km south of Mosul, where US troops and insurgents have battled since November.

In Mosul itself, four police officers patrolling in the west of the city were shot dead by unknown attackers firing from a car, a police commander said.

Another policeman was killed and one wounded when their patrol came under fire in the Amerli area, some 180km north of Baghdad, police said.

South of Baghdad, the bodies of five Iraqis wearing army uniform were found late Saturday, said a doctor at the hospital in the city of Kut where the corpses were taken.

"The five bodies had no identification papers and were discovered with their throats slashed" in a car in al-Suwaira, the doctor said.

Police found the body of a headless woman in the western Al-Adl district of Baghdad.

"A piece of paper, with the word spy written on it, was found near the body of the woman dressed in a black robe," a policeman said.

A soldier's body was found in the Siniyah area, some 200km north of the capital, while the bullet-riddled corpse of a businessman who worked with US forces was found in an area 120km north of Baghdad. (AFP, AP)