Police Major Hashim al-Yasir said the blast occurred at about 6.30am near a food stand in Sadr City where men gather for jobs as day labourers. Such spots have been hit in the past.

Witnesses and police said the bomb appeared to have been planted in a spot where the attackers knew large crowds of men would gather shortly after dawn, hoping to be hired for a day's casual work.

One witness, Muhammad Hamid, who works in a bakery nearby, said: "It was a huge explosion. We carried many of the injured to ambulances and helped remove the bodies."

Many of the injured were taken to the Imam Ali hospital nearby, where hallways were filled with doctors and nurses treating the wounded.

A dozen bodies, their faces covered with cardboard, lay in the hospital garden.

Meanwhile, a bomber killed at least five people and wounded 10 after detonating his explosives' belt in a police station in the town of Qaim, close to the Syrian border, police and hospital officials said on Saturday.

Fifteen corpses were also discovered in the town of Musayib, south of Baghdad, showing signs of gunshot wounds and torture, a defence ministry source said.

The violence occurred ahead of a planned meeting of Iraq's parliament which was to approve the new Cabinet of Nuri al-Maliki, the prime minister-designate.