On Sunday, the bodies of a woman and three men were seen being lifted from the scene of the attack, suspected to be the work of anti-US forces.
"The bomb apparently exploded prematurely at an intersection in front of the academy. Most of the dead were passersby, including seven women," said ministry spokesman Asim Jihad.
At least two cars were destroyed in the attack, which gouged a large crater in Palestine street, one of Baghdad's main roads.
Body parts and personal belongings, such as a woman's purse, lay scattered on the ground. The windshields of several vehicles were shattered by the attack, which occurred at about 7am (0400 GMT).
The blast was earlier thought to have been caused by a rocket.
The oil ministry, a heavily fortified building on the north-east side of the capital, is the target of frequent mortar and missile attacks.
There were recruits lining up near the police academy at the time and they might have been the intended target, Jihad said.
Iraqi journalist Abd Allah Qamir told Aljazeera: "The explosion was terrifying. It took place in a crossing leading to four ministries, including the oil, electricity, and environment buildings.
"US forces and Iraqi police have closed all roads leading to the site.
"Bodies and body parts are scattered in the site and there is blood everywhere," he said.
In a separate attack on Sunday near the culture ministry in eastern Baghdad, seven people were killed and five others injured.
The US defence secretary made
a surprise visit to Iraq on Sunday
Another car bomb targeting a US military convoy detonated on the main road in the Dujail area north of Baghdad.
A US army vehicle was destroyed and soldiers inside the vehicle were injured, Iraqi police sources told Aljazeera.
A captain from the US 1st Cavalry Division confirmed that a convoy was targeted in one of the blasts, but he was not immediately sure which one.
One American soldier was wounded and evacuated to a medical facility, he said.
In a separate attack, a US convoy of military vehicles, trucks and civilian cars came under a rocket-propelled grenade attack in the western Iraqi city of Heet, Aljazeera learned.
One of the US civilian cars was overturned.
The latest attacks coincided with an unannounced visit to Iraq on Sunday by Rumsfeld, who flew from Bahrain to a marine air base in the western desert near Haditha, about 200km north-west of the Iraqi capital.