Panicked patients jumped out of windows to save themselves, witnesses said on Sunday.
"Sixteen people were killed and many others wounded in the fire which broke out at 1am (2200 GMT) and which was due to a short circuit," said local police chief Muhammad Muhaibal.
Women, hospital staff and patients were among the victims, he added.
"The fire destroyed the six floors of the hospital and all the equipment that was there," Muhaibal said, adding that the fire was put out only early on Sunday.
Many patients evacuated
More than 200 patients and staff were evacuated, many of them suffering from smoke inhalation.
"I don't understand why a hospital of this size has only one ambulance and no fire extinguisher. We had to transport the injured in police cars. Even the oxygen canisters we used were practically empty"
Many of the patients and hospital staff jumped out of first and second floor windows when the blaze took hold, said rescue worker Said al-Khafaji.
"They were all panicking. They smashed windows before jumping out," he added.
A police officer at the scene lashed out at the poor condition of the hospital and the lack of any evacuation plan or emergency equipment.
"I don't understand why a hospital of this size has only one ambulance and no fire extinguisher," he said. "We had to transport the injured in police cars. Even the oxygen canisters we used were practically empty."
Many of Iraq's hospitals are in a poor condition and lack basic equipment, largely because of under-investment during the years of crippling UN sanctions first imposed in 1991.