At least 25 people have been killed in a car bomb explosion in a busy shopping district in the centre of the Iraqi capital Baghdad.

About 60 people were left wounded by the blast, which happened near an intersection in the Karrada district.

A building and several cars were set ablaze after the blast in the predominantly Shia market district.

It was the deadliest in a series of attacks that left more than 40 people dead nationwide on Thursday.

Witnesses said they saw dozens of bodies being carried away from the scene of the blast.

"The stalls were turned upside down because of the powerful explosion," 42-year-old Faris Hamza told the Associated Press.

"Most of the store owners were looking forward to good sales but instead they had to close their shops and run away.

"This violence is not only killing people, it is starving them," he added.

The bomb exploded in a section of the city just south of the area where the US embassy and various Iraqi government offices are based.

It is the second deadly bomb attack in the area this week.

PHOTO CAPTION

Map showing location of Baghdad's Karrada district