Mangled metal scraps, sandals and destroyed market stalls littered the bloodstained ground, an AFP reporter said. Strips of flesh splattered shop fronts near the site of the explosion.
"This is not Jihad. There was no US patrol, no Iraqi police at the time of the blast. This car bomb tore civilians to shreds," said Zeid Hamad whose mobile telephone shop lies a few metres away from the blast site.
Fearing more suicide attacks, police later banned all solo-passenger vehicles from the city.
In another attack, a suicide bomber wearing a belt of explosives blew himself up outside an army recruitment centre in Hawijah, north-east of Tikrit, killing 35 people and wounding 33, police and hospital sources said.
Ansar al-Sunna, which has links to the al Qaeda network, claimed the bomb attacks in statements posted on its Website. Some of the labourers killed in Tikrit worked on building projects for the US military, it said.
In Baghdad, at least three people were killed and 10 wounded as insurgents detonated three car bombs and an explosive charge, police said.
In another incident, 45 people were hurt in a blast at a fertiliser plant near the southern town of Basra though it was not clear if this was caused by sabotage or simply an accident.
At least three died in "Operation Matador", as 1,000 marines sent to flush out insurgents from the barren deserts of western Iraq, near the Syrian border, encountered tough resistance.
"There are reports that these people are in uniforms ... There's some suspicion that their training exceeds that of what we have seen with other engagements further east," US Lieutenant General James Conway, operations director of the Joint Staff, said in Washington.
The number of insurgents killed so far is "estimated to be at least 100," a US military statement said.
Zarqawi, Osama bin Laden's frontman in Iraq who has a 25-million-dollar bounty on his head, was sighted in the region, which has been a major route for smuggling arms, money and foreign fighters into Iraq from Syria, Conway said.
The US military said it shot dead by mistake a woman and a child in a car at a vehicle checkpoint, near Ubaydi, in the combat area. The driver ignored warnings to stop, the military said.
Elsewhere, an Iraqi policeman was killed in a drive-by shooting in Baquba north-east of Baghdad and two Iraqi soldiers were gunned down in a drive-by shooting in western Baghdad.
Meanwhile, President Jalal Talabani, in Brazil for a Latin American-Arab summit, denied violence was spiralling out of control.
"There is no anarchy in Iraq," Talabani told AFP. "We have 18 provinces and only four are experiencing problems. We will put an end to this situation very quickly."
In Australia, Foreign Minister Alexander Downer said there was no news on the fate of Australian hostage Douglas Wood, 63, two days after the expiry of a deadline set by kidnappers for Canberra to start withdrawing troops from Iraq. And Japanese authorities said they were still trying to find information on security guard Akihiko Saito, reported missing after a rebel ambush on Sunday night near Al-Asad, 180km north-west of Baghdad.
In Washington, the US Senate unanimously gave final approval to a $82 billion emergency spending bill to fund military operations in Iraq and Afghanistan.
And Kuwait said it had completed indictments against former Iraqi leader Saddam Hussein and his top aides for war crimes committed during Iraq's 1990-91 occupation of the emirate.
They are expected to be used by the Iraq Special Tribunal set up to try former officials in Baghdad.