A suspected suicide bomber blew up his car outside a hotel in central Baghdad shortly after dawn on Wednesday, killing three Iraqis and wounding several others.
The blast followed a bloody day in Iraq in which six US soldiers and two CNN Iraqi staff were killed.
Ambulances rushed to the site of the blast at the Shaheen Hotel, where smoke rose from mangled cars parked outside.
Doctors at nearby hospitals said they were treating at least five people wounded in the blast, which also blew off the facade of a house across the street and smashed windows in the area.
One security guard at the hotel said the blast was caused by a suicide bomber driving a vehicle that looked like an ambulance. It is not immediately clear what the target of the bomb might have been, although hotel employees said some foreigners were staying there.
The attack is another example of the surge in violence in Iraq and follows United Nations' Secretary General Kofi Annan's commitment to send a mission to consider how soon elections can be held.
But one of Mr Annan's envoys Mr Lakhdar Brahimi has indicated he may take the key role advocated for him by Washington as part of the transition to Iraqi self-rule.
"In a country that is not stable enough to take [elections] ... one has to be certain it will not do more harm than good."
Early elections have been demanded by the most revered Shi'ite Muslim cleric in Iraq, Ayatollah Ali al-Sistani, who has challenged the US plan to let regional caucuses choose a transitional assembly.
He says Iraqis should pick their leaders themselves and has huge support across the country, where 60 per cent are Shi'ites.