An explosives-laden car bomb has ripped through a commercial area in a predominantly Shiite neighbourhood of Baghdad, killing at least 50 people and wounding dozens in an attack that was swiftly claimed by the extremist Islamic State group.

Shortly after the explosion, one of the deadliest recently in the Iraqi capital, the Sunni extremist group - which sees Shiite Muslims as apostates - said it was behind the assault. IS said the attack was carried out by a suicide bomber, but Iraqi officials denied that.

The bombing showed that while IS has suffered a number of territorial defeats in the past year, the militants are still capable of launching significant attacks across the country. They also have recently stepped-up assaults inside Baghdad, something officials say is an attempt to distract from their recent battlefield defeats.

Wednesday's bomb struck a crowded outdoor market in Baghdad's eastern district of Sadr City, two police officials said, adding that the blast also wounded up to 60 people, several seriously, prompting fears the death toll could rise further.

Ambulances rushed to the scene where dozens of residents walked through the twisted and mangled wreckage of cars and other debris that littered the pavement, trying to help the victims. The front-side facades of several buildings were heavily damaged. Smoke billowed from ground-level stores gutted out by the explosion.

Karim Salih, a 45-year old grocer, said the bomb was a pick-up truck loaded with fruits and vegetables that was parked by a man who quickly disappeared among the crowds of people.

"It was such a thunderous explosion that jolted the ground," Mr Salih said.

"The force of the explosion threw me for metres away and I lost conscious for a few minutes," the merchant added. He suffered no injuries, but two of his workers were wounded.

Four medical officials confirmed the casualty figures.

In its online statement, IS said it had carried out a suicide attack that targeted a gathering of Shiite militiamen. Authenticity of the claim could not be verified but it appeared on a website commonly used by the Sunni militants.

IS also a controls significant area in northern and western Iraq, including Iraq's second-largest city of Mosul. Commercial and public places in Shiite-dominated areas are among the most frequent targets for the Sunni militants seeking to undermine Iraqi government efforts to maintain security inside the capital.

In February, the group carried out devastating back-to-back market bombings in Sadr City, the stronghold of followers of an influential Shiite cleric. That attack claimed the lives of at least 73 people.

According to the United Nations, at least 741 Iraqis were killed in April due to ongoing violence. The UN mission to Iraq put the number of civilians killed at 410, while the rest it said were members of the security forces. A total of 1,374 Iraqis were wounded that month, UNAMI (United Nations Assistance Mission for Iraq) said.

In March, at least 1,119 people were killed and 1,561 wounded in the ongoing violence.

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