The blast occurred on Tuesday at about 11am in Tal Afar, 420km northwest of Baghdad.
The bomb was detonated by remote control even as many people shopped in the market, said Brigadier Najim Abd Allah, the town’s police chief.
Abd Allah said the 30 people killed and 35 wounded all appeared to be civilians as no Iraqi or American forces were in the area at the time.
Tal Afar, 150km east of the Syrian border, is located in an area where Iraqi fighters have been active.
On 28 September, a woman bomber attacked an Iraqi army recruitment centre in Tal Afar, killing at least six people and wounding 30.
The woman, wearing men’s clothing as a disguise, detonated her hidden explosives while standing in line with job applicants outside the centre.
That attack appeared to be carried out in retaliation for a major offensive by US-led forces in Tal Afar in early September.
Iraqi authorities had said nearly 200 suspected fighters were killed and 315 captured during the offensive. But when they completed the sweep, they discovered that many had slipped out, some through a network of underground tunnels.