Firefighters struggled to bring the fire under control as black smoke billowed over the al-Dora refinery south of the Iraqi capital.Storage tank hit
Assim Jihad, a spokesman for Iraq's oil ministry, said that a rocket had landed on a storage tank for refiined crude.
"A rocket thought to be of the Katyusha type struck a light fuel tank at the refinery, causing fire and material damage," he told the AFP news agency.
"The fire is still burning but the situation is under control," he said during the afternoon.
"The extinguishing operation is still continuing. I cannot say when will it be put out, but the tank is isolated and we are waiting for the remaining fuel to finish burning."
The Iraqi government also issued a statement blaming the inferno on a "terrorist attack", but said that the rockets had struck a benzine pipeline at the facility. Baghdad supply
Jihad said that there were no casualties from the fire but the US military statement said that it was unclear whether anyone had been killed or wounded.
The refinery is one of two that produces Iraq's fuel and receives crude from the country's north and south to supply refined products to Baghdad.
The explosion comes after another major oil-producing hub was bombed last week, 100km north of Baghdad.
Seven policemen were killed when a car bomb blew up near the GFX Baiji refinery - the country's biggest - which is connected by a pipeline to oilfields in the nearby city of Kirkuk.
Rockets also hit the Karrada district in central Baghdad and the heavily fortified Green Zone, which houses the Iraqi parliament, the US embassy and many government buildings, police said.
Seven inmates in an interior ministry jail were killed in a mortar attack in the centre of the capital, security officials said.
Another 21 people were also wounded in their cells when up to three mortar rounds hit the facility.