A car bomb exploded in a livestock market in Iraq's southern Babil province on Thursday, killing 12 people and wounding 40, police said.
The blast occurred in a region that has been relatively peaceful for months.
Violence has fallen across Iraq to lows not seen since the 2003 U.S.-led invasion, but attackers are still capable of carrying out devastating bomb attacks.
It was not immediately clear which group was responsible for the blast in Hamza, a mostly Shiite Muslim town 130 km (80 miles) south of Baghdad. Babil province has a mixed Sunni Arab and Shiite population.
The incident seemed to bear the hallmarks of al-Qaeda, who favor high profile attacks such as bombing crowded places to maximize civilian casualties.
U.S. troops currently play a low-key role in southern Iraq after handing over the main responsibility for security to Iraqi forces.
As the United States prepares to withdraw combat troops from Iraq by Aug. 31, 2010 and to leave the country completely by end-2011, U.S. and Iraqi forces are racing against the clock to prepare Iraqi military and police to handle all threats.