The car was left in a busy petrol station in Bab al-Sharji district, near Iraq’s interior ministry, police and interior ministry sources said.
Fuel shortages and state control of distribution mean that Baghdad’s relatively few petrol stations are generally crowded with drivers waiting to fill their tanks.
The interior ministry is a frequent target of attacks, mainly by Sunni fighters who accuse the ministry and police of working with Shia fighters.
Police also found 10 bodies on Wednesday in the town of Latifiya, 40km south of Baghdad, and said they were investigating whether they were those of 10 Shia travellers kidnapped at the weekend.
Four American soldiers were killed in the western Iraqi province of al-Anbar, the US military said on Wednesday.
The four were killed due to “enemy action” on Tuesday, it said.
The latest deaths bring the US toll in Iraq since the March 2003 invasion to 2,852, according to an AFP count based on Pentagon figures.