Speaking to Aljazeera, Talib al-Janabi, an Iraqi journalist, said the explosion rocked central Hilla at 8.45am (0545 GMT) on Friday when the bomb placed inside a Mercedes was detonated by remote control.
At least 10 people, including three women and two children, were killed and 41 were wounded, said Dr Mohammed Beirum of Hilla General Hospital.
Agencies reported that as Iraqi police and soldiers sealed off Al-Sharia vegetable market, emergency workers lifted wounded victims and dead bodies into ambulances from several streets covered with pools of blood and shattered vegetable stands.
Just a few days ago, al-Janabi pointed out, a bicycle bomb explosion in al-Maktabat Street in central Hilla had killed three people and injured more than 40 others.
Another car bombing took place on Friday at the gate of a US military base in Jbala area in al-Makhaweel town, 25km north of Hilla, al-Janabi reported.
Following the incident, US forces surrounded the area, closing all the entry points and preventing Iraqi forces from approaching the site, he said.
Details of US casualties have not been released, the Iraqi journalist said.
Iraqis gather at the site of the
car-bomb blast on Friday
The explosion in the town followed a triple car-bomb attack in the mainly Shia town of Balad, 70km north of the capital on Thursday evening, which killed about 85 people and wounded more than 110.
Iraqi Healthy Ministry sources have now confirmed that about 85 were killed and more than 110 others were injured, according to al-Janabi.
In May, at least 25 former police commandos were killed and 100 wounded in a double bombing outside government offices in the town.
Reacting to Thursday's Balad explosion, UN Secretary-General Kofi Annan on Friday said he was extremely concerned by growing violence in Iraq, saying no cause can justify such "acts of terror."
He said he was "appalled" by the latest series of bombings that killed more than 90 people and wounded many more, including many women and children, in the central town of Balad.
"No cause can justify such acts of terror"
"No cause can justify such acts of terror," Annan said in a statement released by his press office.
"The secretary general believes that those who refuse to participate in the political process should not, by acts of intimidation and violence, deprive others of their right to do so," the statement added.
The UN chief called on Iraqis of all persuasions not to be deterred by such violence and to express themselves peacefully through the democratic process, starting with the forthcoming national referendum on the draft permanent constitution.