The US military said the suicide car bomb had exploded "near a school, an Iraqi police station and a mosque" and that many civilians were evacuated to nearby civilian and military medical clinics. Habbaniyah is in the so-called "Sunni triangle" 80 kilometres (50 miles) west of Baghdad, lying between the restive cities of Ramadi and Fallujah which are hotbeds of the Sunni insurgency in the Euphrates valley.
The attack came on a day when at least 20 people were killed in a wave of violence in Baghdad, among them eight Iraqi police commandos who were killed in an insurgent assault on a checkpoint near the city's airport.
Saturday also saw a surge of anti-US sentiment in Iraq, with Talabani adding his voice to those of thousands of protesters in denouncing the arrest by US forces of Ammar al-Hakim, son of powerful Shia politician Abdel Aziz al-Hakim. Talabani demanded "guarantees that such abuses will not be repeated," his office said in a statement.
"President Talabani expressed deep regret and sorrow over what happened to the well known national personality Sayyid Ammar al-Hakim," the statement said, using the honorific for a descendant of the Prophet. "President Talabani judges that the treatment of Sayyid al-Hakim was uncivilised and indecent, and he has demanded that the American leadership hold those behind it responsible," it added.
The political storm over the treatment of Hakim junior broke as his father's Baghdad house was targeted by a suicide bomber, who detonated his deadly load of explosives nearby after coming under fire from police. An interior ministry official said a guard and three civilian bystanders were killed in the attack.
US officials insisted that Hakim was "treated with dignity" and had not been specifically targeted but rather detained after troops guarding the Iranian border deemed him to be acting suspiciously.
Hakim senior is the leader of the Supreme Council for the Islamic Revolution in Iraq (SCIRI), the second-strongest party in the Iraqi parliament, which was set up in 1982 by Iraqi exiles in Iran and which retains links to Tehran.
Hakim's son told a news conference in the Iraqi holy city of Najaf that he believed the US military had deliberately targeted him and accused the troops of treating him roughly after they picked him up on Friday. "Senior officials planned to arrest me and these officials gave instructions to personnel at the site," he said. "They tied my hands and blindfolded me."
The US military confirmed that Hakim had been picked up at the Mehran border crossing, describing his detention as an "unfortunate incident." "His convoy was initially stopped because the vehicles met specific criteria for further investigation in an area where smuggling activity has taken place in the past," US spokesman Lieutenant Colonel Chris Garver said.
"Mr Hakim was treated with dignity and respect throughout the incident." Meanwhile, thousands of Iraqi Shia took to the streets of central Iraqi cities to protest Friday's incident. "We would sacrifice our blood for you, Ammar," chanted a crowd in Kut, a Shia town near the Mehran frontier post near where Hakim was detained.
In Najaf, a Shiite holy city in central Iraq, thousands of demonstrators poured through the old city near the sacred mausoleum of Imam Ali. Preachers demanded that the United States apologise for the arrest.
Iraqi and US forces are tightening security on Iraq's border with Iran, and Washington accuses Tehran of smuggling weapons into Iraq to arm the illegal Shia militias fighting the US military. "I express my regret for this arrest," US ambassador Zalmay Khalilzad said, in remarks translated into Arabic on Iraqi television.
"We don't mean any disrespect to Sayyid Abdel Aziz al-Hakim or his family." Also on Saturday, Iraqi troops backed by US aircraft killed "tens" of insurgents in a major assault on the hideout of the Islamic Army in Iraq, a Sunni militant group, an interior ministry official said.