A car bomb killed at least 26 people outside a Shia mosque north of Baghdad.
The explosion in the town of Howaydir yesterday evening was the latest in a wave of attacks against Iraq's Shia majority that it is feared will push the country close to a full-scale civil war in the vacuum left by bickering politicians.
Some 70 people were wounded in the explosion, police said.
Fresh demands from the Shia Alliance over the creation of a government threatened to prolong the political paralysis.
Acting parliament speaker Adnan Pachachi said Iraqi leaders would discuss a national unity government at the next session on Monday and he was optimistic of a breakthrough before then in spite of the Shia Alliance's reluctance to drop its choice of Ibrahim al-Jaafari for prime minister.
Elections for the new government ended four months ago, and the United States and Britain have been pressing Iraqi leaders to agree on who will lead it, fearful the widening vacuum emboldens insurgents trying to undermine the political process.
The car bomb in Howaydir exploded near a mosque and a crowded market, the kind of attack that US and Iraqi officials say is part of a campaign by al-Qaeda leader Abu Musab al-Zarqawi to draw Shias into civil war with Arab Sunnis.
Hospital officials said casualty tolls were expected to rise as ambulances were still rushing in with victims. Last week, a triple suicide bombing at a Shia mosque in Baghdad killed up to 90 people.