An interior ministry official said the blast, which also wounded 18 people, occurred early on Wednesday when the police were raiding a house in which fighters were suspected to be living.
Police said the explosion completely destroyed one house and flattened five other nearby buildings in the Ghazaliya neighbourhood.
They suspected the house was rigged with explosives.
The attack was “evidently an ambush” and “massive amounts of explosives” were used, said a police official.
The US military said in a statement that 1700 to 1800 pounds of explosives appeared to have been used in the attack.
The statement added that American soldiers and Iraqi troops searched the rubble for survivors through the night and rescued one civilian.
In a related incident in west Baghdad, five Iraqi security officials were killed and 20 others were injured in an ambush, police said.
The officials were en route to the raid in Ghazaliya when they were attacked near a mosque late on Tuesday, police commissioner Ali al-Hamdani said.
At least 25 Iraqi policemen were killed in Baghdad, Baquba and Tikrit on Tuesday. In one of the apparently coordinated strikes, a police station south of Tikrit was stormed by armed men who executed 12 officers.
Anti-American clashed with US and Iraqi forces in the centre of the northern town of Samarra on Wednesday, witnesses said.
Samarra has seen heavy clashes
US helicopters circled above and the sound of gunfire could be heard. Shops were shut and the area was deserted.
A US military spokesman said two patrols came under fire, adding there were no US casualties and the clashes were over.
A roadside bomb explosion wounded a US soldier and five Iraqi police officers in Samarra on Tuesday night, he said.
Attacks on US and Iraqi government forces and civilians working for them have been relentless in the city, a centre of the anti-US activity.
An Iraqi National Guardsman was killed on Wednesday in the Siniya area west of Samarra, an officer in the US-backed force said. Around 110 Guards resigned after their Siniya commander was killed in a car bomb explosion along with several Guards two weeks ago.
The eight-member Siniya village council also resigned on Tuesday following the assassination.