Armed men stormed Duwailiyah and killed men, women and children, Colonel Raghib Rawi al-Omaili, spokesman for the Iraqi military in Diyala said.

"Twenty-nine villagers were killed and four were wounded in the terrorist attack on the village of Duwailiyah," he said, adding that the victims included women and children.

"The gunmen were wearing Iraqi military uniforms to confuse the victims."

The attack was grimly reminiscent of a similar attack in May in the remote village of Qara Lus in the same province, in which gunmen wearing Iraqi military uniforms dragged 16 villagers from their homes and shot them dead.

The Diyala province, one of Iraq's deadliest regions, is currently the target of a major US-led operation focused on the provincial capital of Baquba.

But as US and Iraqi forces have pushed through the city militants appear to have fled to more outlying areas, carrying out a blistering series of attacks on remote towns and villages.

On July 7, a suicide truck bomb in the village of Emerli just north of the province killed more than 150 people and wounded hundreds in one of the deadliest attacks since the start of the Iraq war in 2003.

Meanwhile, a suicide bomber blew up his car next to an Iraqi army patrol in Baghdad on Tuesday, killing at least seven people, a medic and a security official said.

The attack took place in Zayuna, an upscale residential area in the centre of the capital.

"We received seven bodies of people killed in the attack and admitted eight wounded victims," said a medic at the city's Ibn Nafis hospital.

A security official said three of the dead were Iraqi soldiers.

Earlier another car bomb exploded on Tuesday in a parking lot near the Iranian embassy in Baghdad, killing at least four people, security officials said.

Another two people were wounded in the attack, Brigadier General Qassim Atta, the spokesman for a four-month-old Baghdad security plan, told Iraqi state-run television.

The vehicle exploded at around 11:00 am (0700 GMT) in the car park which is often used by people visiting Tehran's mission in the Iraqi capital.

The blast rattled windows in surrounding buildings and cloaked the unpaved parking lot in a pall of grey smoke, leaving at least one vehicle engulfed in flames, an AFP correspondent on the scene said.

The parking area near the Iranian embassy has been targeted before. In April two car bombs exploded there without causing heavy casualties.

On Tuesday dozens of men collected the charred bodies of their relatives from local morgues as grief-stricken women beat their chests and collected the victims' belongings.

Kirkuk residents said the carnage, which wounded 185 people, was aimed at splitting the city and triggering ethnic and sectarian bloodshed.

"The explosions are meant to incite sectarianism among the people of Kirkuk," said Sunni tribesman Sheikh Ismail al-Hadidi.

The city's streets were deserted on Tuesday as pedestrians stayed indoors and most shopkeepers downed their shutters, an AFP reporter said.

Kirkuk's policemen also appeared shattered by the blasts.

"Yesterday's catastrophe was unprecedented. The charred and mutilated bodies stunned us. We are human beings, after all," said policeman Aras Ghafour.

"What should we do when a bomber wants to kill himself and innocent people? The challenge is big and the situation is serious."

Ethnic Kurdish leaders want to absorb Kirkuk into their autonomous northern region despite stiff opposition from the city's Arab and Turkmen residents.

Tensions have heightened in recent months ahead of a possible referendum by the end of the year to decide the city's fate.