A large explosion was heard in central Baghdad on Wednesday and thick black smoke was seen rising above the skyline, witnesses said.
Witnesses at the scene in riverside Haifa street, scene of previous clashes with insurgents, said the blast appeared aimed at a passing US armoured column.
The explosion created a large crater in the road and left the car a twisted, smoking wreck, with the engine blasted out and resting nearby.
Nearby windows were blown out and some shops and homes were slightly damaged.
The capital is the scene of frequent attacks by insurgents fighting the US-backed interim government.
Last week, two suicide bombers killed five people when they blew themselves up inside Baghdad's Green Zone, home to key government offices and the US and British embassies and supposedly the safest places in Iraq.