There was no immediate claim of responsibility for the blast.
In a separate development, Iraqi police arrested five US contractors in connection with the murder of a colleague, officials said on Sunday.
The body of Jim Kitterman, a 60-year-old Texan, who was reportedly bound, blindfolded and stabbed, was found dead in his car last month in the protected Green Zone where his small construction company was based.
A US embassy spokesman said no formal charges had been filed against the men and that they "appear well".
If the men appear in court, it would be the first time American citizens face Iraqi justice since a bilateral security pact came into force in January.
Iraq regained control of the Green Zone on January 1 under a US-Iraqi security agreement.