Authorities said the blast took place near a bus terminal in Baghdad's Hurriya district.
“We were about to leave the house when the car bomb arrived at the scene, suddenly the blast took place. We did not know what happened. This house and that vehicle were damaged in the blast. What did these people do to get this?” eyewitness Ahmed said.
Tensions between Shi'ite, Kurdish and Sunni factions in Iraq’s power-sharing government have been on the rise this year. Militants strike almost daily and have staged at least one big attack a month.
The latest violence followed more than a week of protests against Shi’ite Prime Minister Nuri al-Maliki by thousands of people from the minority Sunni community.