Angry Karradah residents took to the streets chanting "We want the Sunnis out!" after the blast, the second suicide bombing in three days in the neighborhood. The explosion destroyed three minivans, 11 cars and dozens of shops, as well as the local post office, according to a resident.
Seven charred bodies were visible in one of the vans, including that of a woman who was half out a window in an apparent attempt to escape the inferno.
A second huge explosion later rattled the capital, but police said it was a controlled blast to destroy a second car explosive that had been disabled before its suicide bomber could detonate it.
As the rockets fell and bombs exploded across the Tigris River, the public address system inside the Green Zone compound could be heard warning in English that people should take cover because "this is not a drill."
Five people were wounded in the rocket attack, none seriously. Mortar and rocket attacks hit the zone frequently but reported casualties are rare.
The attacks came on a day that police reported 61 killed in sectarian violence nationwide, including the bodies of 22 torture victims dumped in Baghdad, and a parliamentary debate was suspended briefly after arguments broke out between Sunnis and Shiites over security.
In the Sunni neighborhood of Doura, the desperation of local residents almost turned a U.S. humanitarian mission into a riot, reports CBS News chief foreign correspondent Lara Logan.
Crowds of women and children frantically swarmed around the U.S. supply truck, pushing each other in the frenzy. Even fiercely proud Iraqi men begged for some of the blankets and kerosene heaters.
It was all part of the U.S. effort to turn the violent Sunni area into a model for the rest of the neighborhood to follow.
By helping to meet people's most basic needs, like supplying gas heaters, the hope is the people will help U.S. soldiers keep the area secure, Lieutenant John Davis told Logan.
Parliament held yet another raucous session, this time witnessing a heated exchange between Prime Minister Nouri al-Maliki and Sunni legislator and cleric Abdul-Nasser al-Janabi, who accused the Shiite-dominated government of carrying out purges against Sunnis, the minority sect in Iraq.
The prime minister was seeking support for his and President Bush's plan to crush sectarian violence in Baghdad.
The prime minister vowed to go after those behind Baghdad's rampant violence no matter where they try to hide and regardless of sectarian beliefs, promising at the same time to ensure the human rights of innocent Iraqis.
In other developments: