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A bomb ripped through a crowd of Shiite labourers, one of six attacks in Baghdad that killed at least 36 people, as the monthly death toll for American troops and civilian contractors passed 100.
Four non-American coalition soldiers were also killed during the month.
The blasts came as Britain evacuated its large consulate in the southern city of Basra after it came under repeated mortar attack, and one day after 17 Iraqi police were murdered when they left a nearby British training base.
The US military said October had seen 96 US troops, four coalition soldiers from other countries and five American contractors killed, confirming it as the bloodiest month for the allies since January 2005.
The violence raging around the country will deepen Iraq's bitter sectarian divide and undermine efforts by Prime Minister Nuri al-Maliki's government and his US and British allies to end Iraq's 44-month-old war.
US National Security Adviser Stephen Hadley visited his Iraqi counterpart Mowaffaq al-Rubaie in Baghdad to discuss the creation of a new joint security committee and how to transfer Iraqi troops to local command, officials said.
Iraq's interior ministry spokesman Brigadier General Abdel-Karim Khalaf said the worst bomb blast appeared to be the work of an extremist Sunni faction targeting Sadr City, a sprawling Shiite slum in east Baghdad.
“This has the fingerprints of the Takfiris and Al-Qaeda all over it,” he said. “It was a bomb that exploded in an area where day labourers gather. We have 26 martyrs and 60 injured.”
Doctor Aram Jurain from Baghdad's Al-Kindi hospital said, however, that two Sadr City clinics alone had received 27 corpses and 50 wounded, many of them in a critical condition. He predicted the death toll would rise.
The bomb exploded as men gathered in an area where minibuses arrive to pick up casual workers, the scene of many previous bombings.
“The bomb was hidden in a plastic bag. It's the third time that an attack has hit this place this year,” eyewitness Abu Zeinad told AFP, as pools of blood congealed amid the twisted remains of the workers' tools.
In and around Baghdad at least five car bombs exploded — outside a hospital, at a bureau de change, in two Shiite residential districts and near a bus — killing a total of 10 civilians and wounding dozens more.
Iraq's beleaguered police were also attacked in the north of the country, where a suicide bomber detonated a bomb belt outside force headquarters in the oil city of Kirkuk, killing two officers and a child, police said.
Sadr City is a bastion of radical cleric Moqtada al-Sadr's Mahdi Army militia and such an attack could provoke bloody reprisals against Baghdad's Sunni Arab minority.
US forces can also expect to face the fury of local people.
American troops hunting for a kidnapped comrade have this week mounted road blocks and patrols around the fringes of Sadr City, and many blamed the forces for failing to prevent the attack.
“The responsibility for this attack lies with the occupying forces,” said Hamdallah Rikabi, a spokesman for Sadr's movement.
“Everybody knows that before this, this was a secure city and deploying the occupier's forces is just harming our security,” he said.
Meanwhile, in the southern Iraqi city of Basra, police were hunting for a gang which on Sunday stopped a minibus carrying 17 instructors home from a police academy run by the British military, and killed them.
“I confirm that 15 policemen and two translators were killed,” said Major General Abed Khudhir Al-Tahir, head of Basra's security committee. “We are currently investigating the driver in a bid to find the actual culprits.”
The murders will be seen as a huge setback for British efforts to pacify southern Iraq, which hinges on training Iraqi security forces to enable them to take over responsibility for an area rife with illegal militia groups.
This plan hit another setback Monday when Britain confirmed it was evacuating most staff from its major consular complex in Basra, headquarters of the civilian arm of reconstruction efforts in southern Iraq.
“It's in response to an increased threat from mortar and rocket attacks in the compound,” a Foreign Office spokeswoman said. “We're hoping it's temporary and are keeping this decision under review.”
The Foreign Office compound in the Basra complex has been hit three times in the past three months by barrages of up to 14 mortars and rockets.
In another attack Monday, a bomb damaged a jeep carrying private security contractors through Basra. In the aftermath of the blast a local girl was reportedly shot, triggering a protest by stone-throwing youths.
Although the area around Basra, which is largely Shiite, has been spared the worst of the sectarian violence that has torn apart life in central Iraq, the region is home to well-armed political, tribal and criminal factions.
Britain has 7,200 troops in southern Iraq. Reports suggest their commanders would like to start pulling them out as early as February next year, although Prime Minister Tony Blair insists they will stay “until the job is done”.
