Sergio Vieira de Mello, the UN's special representative in Iraq, was trapped under rubble and seriously injured. He was the most senior member of the UN staff to have died in a conflict situation.

Rescuers kept the Brazilian-born diplomat talking for several hours but he lost his fight for life around 1800 GMT after his body was pulled free. Many others remained under the debris of the building as desperate efforts are being made to rescue them.

No one has yet claimed responsibility for the bombing. The explosion at the UN's Canal Hotel headquarters occurred on Tuesday at 4.40pm (1240 GMT), a UN spokesperson said. 

US military say the huge explosion was caused by a cement truck packed with explosive.

Also among the wounded was the director of the UN oil-for-food programme in Iraq, Benon Sevan, said spokesperson Veronique Taveau. She said Sevan had been giving a press conference at the time.

Names of the injured or dead were not being released until relatives had been contacted. A spokesman for the UN giving an evening press conference in New York also warned that many of the injured were "gravely injured".

He said everyone was dependent on America for security in Iraq. He also condemned the "criminal terrorist attack" and said the bombing would not stop international attempts to "help the people of Iraq". 

US President George Bush, speaking from his ranch in Texas, echoed the UN's comments, adding Washington would continue its "war on terror" and that "we will prevail".

Key UN site

Hundreds of UN staff work at the site, a former hotel in eastern Baghdad. The hotel complex was formerly the base for UN weapons inspectors and houses offices of other UN agencies.

A huge column of black smoke was seen rising from the site, strewn with rubble and damaged vehicles.

The UN is playing a limited role in post-war Iraq, with the US-led invasion forces assuming military and civilian control of the country.

The bombing comes after a recent wave of attacks by resistance fighters on infrastructure aimed at undermining the authority of the US-led occupation authority in Iraq.

The attacks have included bombings of oil and water pipelines, which have caused the main oil export pipeline to close and disrupted water supplies to the capital.

Last week, a car bomb attack on the Jordanian embassy in Baghdad left 17 dead.