Just a day earlier, the mayor of the capital had threatened to quit, because of mounting infrastructure problems - including a lack of clean drinking water.
The blaze on Friday at a power station north of Baghdad cut off electricity to a water plant serving northern and western parts of the capital, the officials said. The fire halted all distribution from the waterworks, and project director Jassim Mohammed said repairs could take three days.
The US military press office initially quoted Iraqi engineers as saying the fire was triggered by a defective transformer. However, an Iraqi municipal official said at least two mortar rounds had struck the power station. Mohammed, too, attributed the fire to an attack.
A US spokesman for Task Force Baghdad, Master Sgt. Greg Kaufman, said later that unexploded ordnance was found in the area, but "we're still not sure" what triggered the fire.
The water shortage added to the misery of Baghdad's estimated 6.5 million people, who face frequent electricity outages, erratic fuel supplies, congested traffic, diminished public services and the ever present threat of kidnappings and car bombings.
On Thursday, the city's mayor, Alaa Mahmoud al-Timimi, threatened to quit unless the government provided more money for repairs. Efforts to expand the water supplies were set back last month when insurgents sabotaged a pipeline near Baghdad.
"There is an anxiousness here to deal with the infrastructure problems and that, for sure, has a political cost to the current government if they can't fix the problem," a US official told reporters at a briefing.
"There is an anxiousness here to deal with the infrastructure problems and that, for sure, has a political cost"
US official on Iraq's growing civic problems
"And there are no quick fixes." It's just the news Zainab Mohammed, 38, doesn't want to hear. The housewife said she could handle frequent power cuts and even daily violence; "but water, no!"
"I have an infant and she needs a lot of care," she said. "Water is a vital thing in my life, for my baby's nursing bottles and her laundry." Nada Matti, 49, who works for the Ministry of Finance, said she had stocked up on bottled water, "but we can't afford to do this every day."