The explosives-packed car was parked in front of the General Hospital in the town of Mahmudiya, and blew up after two patrols of Iraqi police pulled up outside, witnesses said.
An Interior Ministry spokesman told Aljazeera that 19 people were killed and 34 wounded in the attack.
Other reports cite the head of the emergency room at the hospital as saying that 31 people were killed and 28 wounded in the blast.
Police sources put the death toll at 30 with around two dozen wounded. It was not clear if it was a bomber had blown himself up inside the vehicle.
The bombing is the latest incident in an apparently stepped-up campaign of violence over the past week and in the run-up to parliamentary elections set for 15 December.
Since last Friday, nearly 200 people have been killed in a series of bombings and car bomb blasts, including 77 killed when bombers strapped with explosives blew themselves up inside two Shia mosques in the northern town of Khanaqin.
Mahmudiya is in a violent region south of Baghdad dubbed the Triangle of Death for the high number of attacks.
Nearly 200 people have been
killed in attacks since Friday
It is part of a belt of mixed Sunni and Shia towns where sectarian tensions have spilled over into violence, leading to fears Iraq could be sliding towards a full-blown civil war.
Earlier, Iraq's Defence Ministry said soldiers had found a car west of Baghdad that was filled with booby-trapped children's toys packed with hand-grenades and explosives.
A government spokesman said two people had been detained.
In another incident, three bodyguards of Iraq's Industry Ministry were shot dead by armed men in central Baghdad.
On Wednesday, three US soldiers were killed in two separate attacks targeting their patrols in Baghdad.