The intended target was a US civil administration building in a residential area, but the car bomb was so powerful - an estimated 800 tons of explosives backed into a Landcruiser - that a number of neighbouring homes were also levelled.
As the dust and smoke filled the air, the first casualties were rushed to nearby hospitals on Wednesday evening, September 10.
One couple was in complete shock as they carried in the bloodied body of their small child to the Arbil Ahiti Clinic.
"There was absolutely nothing we could do for that boy - he was literally blown apart - but the parents still wanted us to try and save him," said Mahmoud Nariman, a 24-year-old intern who was on duty at the Ahiti emergency ward that night.
"There was nothing we could do for that boy - he was literally blown apart - but the parents still wanted us to try and save him"
Mahmoud Nariman, intern at Ahiti hospital
Two-year-old Mohammad Sarjnar was the first victim pronounced dead in the Arbil bombing, but by the following evening as the last bodies were finally pulled from the rubble, the casualty list stood at three dead and 55 wounded.
The estimated six injured US personnel were evacuated by helicopter to the American military base in Mosul, while the Iraqi wounded filled the corridors of Erbil's three small hospitals.
"We are not just treating physical wounds here," said an exhausted Nariman. "The families are all in shock, and the fear is infectious. This was the first such incident in our city, but already everyone is wondering when the second or third attack will take place."
Arbil was liberated from Saddam Hussein's regime during the Kurdish uprising in 1991, and since that time has been under the control of Massoud Barzani's Kurdish Democratic Party (KDP).
There was no fighting in this area during the US invasion which ousted Saddam Hussein and Arbil was spared from any of the post-war looting and violence which has gripped most of Iraq.
The KDP Peshmerga militia and the Kurdistan police force, backed by a small number of US military personnel, have remained in firm control of the security situation in northern Iraq, until now.
However, in the aftermath of the Arbil blast, that is likely to change soon. The ethnic and religious divisions are widening and the possibility of full-scale civil war erupting increases daily.
During his whirlwind visit to Iraq last weekend, US Secretary of State Donald Rumsfeld put a positive spin on American achievements to date and claimed to have witnessed an increase in "political pluralism" throughout the country.
Given that there are over 120 political parties registered in Iraq since Saddam's regime was removed, Rumsfeld 's comment is not without merit. However, the structure and composition of these various factions only serves to highlight the widening divide in Iraq - rather than any move toward collectivity.
More alarming is that all of these new "democratic" political parties have their own armed security forces. "There are guys with guns everywhere here, and frankly, I don't have a clue as to who the hell's who," said a visibly frustrated US Special Forces Staff Sergeant.
Remains last week of a bombed
US humvee in Mosul used by the
101st Air borne division
The big NCO was guarding the police line at the Arbil bomb site, and he was trying to respond to reporters' questions as to who was in control of the investigation.
While three US troopers tried to keep the media behind the taped off site, a cluster of armed Iraqis milled around behind them. Evident from their uniforms, they were representatives from the KDP Peshmerga, the Kurdish police and Turkmen militia.
What made this scene particularly dangerous was the fact that inter-factional violence between the Kurdish and Turkmen minorities has flared into armed clashes on several occasions over the past month, in the vicinity of Kirkuk.
About 100 kilometres south of Arbil, Kirkuk is the oil-rich centre of northern Iraq which until 9 April had remained under the control of Saddam's forces.
When the Iraqi regime collapsed, Kurdish Peshmerga and US Special Forces had quickly pushed into Kirkuk to secure the city and its surrounding oil wells.
The arrival of so many Kurdish militia was not welcomed by the Turkmens, who represented a majority of Kirkuk's pre-war population of approximately 600,000.
An Iraqi ethnic Turkmen injured
in clashes against Iraqi Kurdish
peshmergas in Kirkuk
"In response to the desecration of several Shia holy sites by the Peshmerga, the Turkmen retaliated against the Kurds," explained Asif Serturkmen, a Toronto-based, Canadian Turkmen representative presently in Kirkuk.
Over the course of two days (22-23 August) there were 10 Turkmens killed and 22 wounded along with a similar number of Peshmergas.
Although US forces in the area had been able to restore order, the incident has the potential to develop into a wider conflict with much more serious consequences.
The Sunni Muslim Turkmen victims were buried in their own villages, but the Shia Turkmen dead were taken to the holy city of Najaf for a ceremonial burial.
"The result was that the Shia clerics organised a major demonstration in Kirkuk to express solidarity with the Turkmens," explained Serturkmen. "The most serious proclamation they made was that Kirkuk - and its oil revenue - belong to all Iraqis, and they will not accept it becoming a Kurdish city."
For the Iraqi-Kurd Shia Arab majority, Kirkuk represents much more than a provincial capital. Should they be able to gain control of Kirkuk's vast oil revenue, the concept of an independent State of Kurdistan becomes economically feasible.
Although officially the two Kurdish leaders - Massoud Barzani and Jallal Talibani - are co-operating with the US-sponsored Interim Council as part of a unified Iraq, the Kurdish separatist movement is very much alive in northern Iraq.
A sign at the border welcomes visitors to the "State of Iraqi Kurdistan" and all official buildings , Peshmerga guardhouses and even private homes fly the Kurdistan - rather than the Iraqi flag.
The fact that after five months of occupation, the US military has yet to disarm the Kurdish Peshmerga, has concerned the other minority leaders.
"We repeatedly warned the Americans not to start a war without properly preparing for its aftermath," said Sanaan Ahmet Aga, the President of the Iraqi Turkmen Front (ITF).
"The Americans have no choice but to admit that they have failed - and to turn responsibility for Iraq over to the UN"
Sanaan Ahmet Aga, President of the Iraqi Turkmen Front (ITF)
"Turkey and the other neighbouring countries will never accept an independent Kurdistan - as it would incite their own Kurdish minorities to secede."
Iraqi Arab tribal leaders are also concerned with such a possible division in the north. Last week in a surprising development, the top tribal headsmen met in Ankara to discuss with government officials the possible deployment of Turkish troops into northern Iraq.
"This is not something which we desire - as it is setting the stage for a full-scale civil war," said Sanaan Aga. "The Americans have no choice but to admit that they have failed - and to turn responsibility for Iraq over to the United Nations - before even more must suffer and die."