Officials say many other people were wounded in the blast.
The bomb went off at an open-air market that was packed with shoppers. Women and children were among those killed.
U.S. Ready To Continue Troop Increase
The U.S. Defense Department has notified more than 35,000 troops to be prepared to deploy to Iraq beginning this fall.
The move would allow commanders to maintain the continuing buildup of troops through the end of 2007, if needed.
Pentagon spokesman Bryan Whitman said the deployment orders do not mean that the military has made a decision to keep the increased level of 20 brigades in Iraq through December. A brigade is roughly 3,500 soldiers.
Violence Continues
Meanwhile, at least 68 Iraqis were killed or found dead nationwide on May 7.
Suicide bombers killed 13 people in a pair of attacks around the Sunni city of Al-Ramadi in areas controlled by the Al-Anbar Salvation Council, an alliance of Sunni tribes fighting to drive Al-Qaeda from their territory.
Council officials blamed the attacks on Al-Qaeda.
In a statement post on the Internet on May 7, an Al-Qaeda front organization -- the Islamic State of Iraq -- warned Sunnis against joining government security forces. The group also claimed responsibility for attacks on May 6 that killed 34.
During a telephone call, Prime Minister Nuri Maliki assured U.S. President George W. Bush of his determination to work with Sunni leaders.
This comes as Iraqi Vice President Tariq Hashimi told CNN he would lead a Sunni walkout from the cabinet and parliament if changes are not made to the constitution by May 15.
U.S. Vice President Dick Cheney heads for the Middle East today on a tour to shore up support on stabilizing Iraq, as well as putting more diplomatic pressure on Iran over its controversial nuclear program.
During his trip, Cheney will visit the United Arab Emirates, Saudi Arabia, Egypt, and Jordan.
(AP, AFP, Reuters)