"We have eight dead yesterday," said occupation authority spokesman Charles Heatly on Monday.

"[There were] four Iraqi FPS (facility protection service members) and two civilian Iraqis, two people in the cars, one of which was at the detonation point and the other we are trying to figure out if he was taking part in the attack or just a bystander," he said.

Heatly added that several people had been arrested in connection with the Sunday attack.

Witnesses said they saw a car crash through the security barrier at the Baghdad Hotel and explode.

The hotel is widely thought to be used by members of the CIA, officials of the US-led occupying coalition and their Iraqi partners in the Governing Council as well as US contractors.

"No US forces were killed in Baghdad Hotel blast on Sunday," said Iraqi Governing Council spokesperson Muwaffak al-Rubai. "And none of the Governing Council members, who are based in Baghdad Hotel, were injured, as they were not present at the attack site." 

A policeman at the scene said earlier at least 10 people had been killed.

'Death, hatred and explosions'

One witness said security guards opened fire on a car. A second car then drove up and exploded.

Smoke rises from deadly blast
outside hotel used by US officials

"People dived onto the ground, and I saw people dying on the pavement around me," Safa Adil said. "Iraq has just become a place of death, hatred and explosions."

Aljazeera's correspondent reported seeing body parts scattered 150 metres from the site of the blast.

The explosion sent a large plume of smoke into the air and shook windows in buildings several blocks away.

US helicopters circled overhead minutes after the blast while dozens of Iraqi police cordoned off the area.

Soldiers and plain-clothes officials in US flak jackets carrying AK-47 rifles swarmed the street outside the hotel.

Another explosion rocked al-Talai roundabout (square) in al-Huraiya area in Baghdad, Aljazeera’s correspondent in the city reported.

The latest blasts come after a series of attacks aimed at Western targets in Iraq, which the US blames on fighters resisting the US-led occupation.