The attack occurred at about 9am (0600 GMT) on Tuesday as the convoy of Abd al-Qadir Zanganah, the head of the city's waterworks, approached a roundabout in the Kurdish district of Rahimawa in the north of the city, local police chief Colonel Adil Zain al-Baddin said.
He said preliminary information indicated the attack involved a remote-detonation of a bomb-rigged vehicle parked on a side street.
Dozens of vehicles were reduced to twisted rubble and several buildings and shops were damaged as crowds gathered at the scene and US troops in armoured vehicles and on foot ringed the area.
Five of the wounded were in serious condition, hospital officials said.
There was no immediate word on the condition of Zanganah, who is a member of the Kurdistan Democratic Party (KDP) led by Massud Barzani.
Barzani is one of the most vocal proponents of giving oil-rich Kirkuk to the Kurds, a position strongly resented by the area's Sunni Arab and Turkmen population.
Claims to Kirkuk
The KDP's Kirkuk chief Najat Hasan Karim escaped an assassination attempt on Saturday as he drove back to the city from a funeral service in Kifri, to the southeast.
Barzani's (L) party sees Kirkuk as
a future Kurdish capital
Kurds have made Kirkuk, which they regard as the future capital of the Kurdish areas, one of the main issues in their negotiations to form a coalition government with the Shia alliance which won the most seats in the country's January election.
They say the city's Kurdish character was forcibly altered in the 1970s with ousted Iraqi president Saddam Hussein's Arabisation drive in the area.
Meanwhile, the director of Iraq's South Oil Company escaped an assassination attempt in Basra on Tuesday, Iraqi police and oil officials said.
They said a roadside bomb exploded beside a convoy carrying Jabar al-Adi, but he was not hurt.
Anti-US forces have been frequently attacking Iraqi oil officials and energy infrastructure.