The assault triggered blasts that caused the devastation.
Officials said the injured included at least 31 Iraqis, 12 Filipinos, 10 Poles, 10 Hungarians and an American.
According to Aljazeera's correspondent, the first explosion rocked the city at 07:30am (1030GMT).
The blasts occurred when a pair of trucks loaded with explosives tried to drive near the front of Camp Charlie in Hillah.
Guards fired at the vehicles, causing one to explode, killing the driver, said Lieutenant-Colonel Robert Strzelecki. Another truck struck a concrete barrier and exploded, damaging a nearby house.
The explosion damaged several homes neighbouring the base, leaving piles of rubble, collapsed roofs and shattered walls. A local hospital treated dozens of people, including infants and children, for shrapnel wounds.
Sources at al-Hilla public hospital told the correspondent they had received the bodies of seven Iraqi civilians.
The correspondent said one child was in a critical condition. "The child's family members were all killed in the explosions", the correspondent said.
Poland leads a multinational force of about 9500 soldiers in south-central Iraq. Its troops also fought in the US-led war that began 20 March to oust Saddam Hussein.
Hungary has 300 troops in Iraq providing logistical support and humanitarian aid.
Hungarian Defence Ministry Spokesman Istvan Bocskai said two of the Hungarian soldiers were seriously wounded, but the injuries were not life-threatening.
Polish premier Leszek Miller (L)
meets his troops in Iraq
"One of them is being treated in Baghdad and the other in Babylon," he said, adding Hungary had no plans to withdraw the soldiers. Camp Babylon is the name given to the Polish headquarters.
A Polish officer was killed in November 2003, the first Polish soldier killed in combat since the aftermath of World War II.
Since the beginning of the year, 284 people have been killed in bombings across Iraq, including 109 killed in Arbil and 100 in separate attacks in Baghdad and Iskandariyah.