Police at the scene said a bomb planted on a road exploded on Tuesday as civilian vehicles were passing by.
They said the blast had completely destroyed one Iraqi vehicle, killing all four occupants.
At least three persons were injured.
Baghdad mayor killed
Meanwhile, the US-backed mayor of the Shia-populated Baghdad district of Sadr City, has been shot and killed in an altercation with American troops, the US military announced.
The US Central Command said the clash, which is now being investigated, took place at the building housing the district advisory council, of which Muhammad Ghazi al-Kaabi was chairman.
"This incident reportedly occurred as a result of a confrontation following Muhammad's refusal to follow instructions from the on-site security official, who was enforcing security procedures stemming from recent car bombing incidents in accordance with standard rules of engagement," the command said in a statement.
A shot fired during the altercation wounded the mayor in the lower extremities, the military said.
Although he was given immediate medical assistance on the scene of the incident and quickly taken to a US military hospital, al-Kaabi was pronounced dead upon arrival, according to the statement.
The command did not reveal who fired the shot. Nor did it offer any details about the nature of al-Kaabi's wounds.
US Central Command did not reveal who fired the shot that killed the mayor
A military coalition official contacted by telephone by AFP said he was unable to provide any further details.
It was not immediately clear what implications al-Kaabi's killing would have on the sprawling and politically sensitive Sadr City, which is home to two million Baghdad Shias.
Formally known as Saddam City, this part of the Iraqi capital was renamed after Ayat Allah Muhammad Baqir al-Sadr, a spiritual leader of Iraqi Shias, believed to have been assassinated by the Saddam Hussein's government in 1999.