A dozen recruits tried to flee but were also shot.
The bodies, in torn and bloodstained civilian clothes, were taken in the back of trucks to a National Guard base in the town of Mandali, near the Iranian border, where they were laid out in rows. Some bystanders wept.
A group led by al Qaeda ally Abu Musab al-Zarqawi claimed Sunday's deadly attack on Iraqi army recruits, according to an Internet statement.
al Qaeda Organisation for Holy War in Iraq, the new name of Zarqawi's group, said in a statement posted on a Web site often used by militants that it killed 48 "apostates" in the attack.
The attack was another blow to the US-backed interim government's efforts to build up Iraqi security forces to tackle a raging insurgency along with US-led forces.
"They were all executed, we found them executed," said Interior Ministry spokesman Adnan Abdul-Rahman. "We found them arranged in groups of 12 with bullets in the head," Iraqi National Guard officer Jassim Saadi told Reuters Television in Mandali, where the bodies were brought.
The recruits, based at Kirkush, some 90km north-east of Baghdad, had been heading for home leave when they were ambushed late on Saturday. Villagers heard the gunfire, found the bodies and called police. The minibuses were burned.
A senior security official, declining to be named, said most of the soldiers were from poor families in the mainly Shia cities of Basra, Amara and Nassiriya in southern Iraq. "It appears that they were ambushed by a large, well-organised force with good intelligence," the source said.
Guerrillas have frequently targeted Iraqis seen as co-operating with the US military or the interim government. Suicide bombings have killed hundreds of army, police and National Guard recruits in recent months.
Iraqi security forces have taken a more visible role in counter-insurgency operations in the past few months and the interim government sees them as a key weapon in its drive to win back control of all rebel areas before elections in January.
A US embassy spokesman said a diplomatic security officer had been killed by a mortar attack on Camp Victory, a sprawling US military headquarters near Baghdad's international airport.
A Bulgarian soldier serving with US-led multinational forces was killed and three others were wounded when a car bomb exploded near their military convoy in the southern city of Kerbala, government and military officials said.
Gunmen shot dead a Turkish truck driver in northern Iraq, police said, a day after two other truckers from Turkey were killed near the city of Mosul. The man's body was found beside a highway near Iraq's largest refinery at Baiji, 210km north of Baghdad.
The headless body of an unidentified man in a business suit was found with feet tied, floating in the Tigris River near the northern city of Kirkuk, police said.
The body was the fourth to be recovered from the area in the past two months. The other three appeared to have been Iraqis working with US forces, police said.
US warplanes pounded targets in rebel-held Falluja, the toughest guerrilla stronghold, on Sunday, killing five people, witnesses said. Hospital officials said the dead were civilians.
A powerful group of Sunni clerics threatened to call a boycott of Iraq's planned elections in January if US forces launch a widely expected full-scale assault on Fallujah.