A powerful explosion destroyed a house in western Baghdad during an overnight raid by police, flattening several nearby buildings and killing at least 28 people, including seven policemen.
Police said the house had been raided because it was a suspected base for foreign militants.
As police burst in, an explosion tore through the building. Five nearby houses were also destroyed.
By dawn, US and Iraqi troops had sealed off the site.
Some locals said they believed the house had been used by foreign Arab fighters.
The US military says the main groups behind the insurgency in Iraq are Sunni Muslim militants, former supporters of Saddam Hussein, and foreign fighters.
Washington has offered $25 million for information leading to the death or capture of Jordanian militant Abu Musab al-Zarqawi, who has been hailed as the head of Al-Qaeda in Iraq in an audiotape purportedly from Osama bin Laden aired this week.