Izzadine Saleem, also known as Abdel-Zahraa Othman, was waiting in a Governing Council convoy at a U.S. checkpoint along a tree-lined street preparing to enter the Green Zone when the bomb was detonated. It apparently had been rigged with artillery shells and hidden inside a red Volkswagen.
Iraqi officials said nine people, including the bomber, were killed and 14 Iraqis and an Egyptian were wounded in Monday's attack. Kimmitt put the death toll at seven. Two U.S. soldiers were slightly wounded.
Iraqi and coalition officials vowed that the power transfer would take place on June 30, as scheduled, despite the attack.
Secretary of State Colin Powell called Saleem an Iraqi patriot. "Terrorist may have taken his life, but they will never be able to kill his dreams or those of the Iraqi people."
In other developments:
Saleem, the name he went by most frequently, was a Shiite and a leader of the Islamic Dawa Movement in the southern city of Basra. He was a writer, philosopher and political activist, who served as editor of several newspapers and magazines. The position of council head rotates monthly.
As the current council president, a rotating position, Saleem was the highest-ranking Iraqi official killed during the U.S.-run occupation. His death occurred about six weeks before the United States plans to transfer power to Iraqis and underscores the risks facing those perceived as owing their positions to the Americans.
In a statement read to reporters, Saleem's successor, Ghazi Mashal Ajil al-Yawer, pledged the council's resolve in the face of the terrorist threat.
He said the council would "not deviate from the march to which he devoted his life — the march of glory, happiness and freedom for our people...the march toward building a democratic, federal, plural and unified Iraq."
Two other well-known council members, Adnan Pachachi and Ahmad Chalabi, reportedly escaped the blast because their cars had made it inside the compound — safely behind the concrete blast barriers, reports CBS News Correspondent Jim Acosta.
Saleem was the second member of the U.S.-appointed council to be assassinated. Aquila al-Hashimi was killed in September.
L. Paul Bremer, the U.S. administrator of Iraq, denounced the bombing as a "vile act" and a "shocking and tragic loss."
The claim from the Arab Resistance Movement was posted on an Internet site devoted to Iraqi issues. The Web site carried other messages of praise for the killing.
"Two heroic members of the Arab Resistance Movement, Al-Rashid Brigades — and they are Ali Khaled al-Jabouri and Mohammed Hassan al-Samaraei — carried out a qualitative heroic operation" that killed Saleem, the statement said.
It said the group will continue its "jihad" or holy war until Iraq and Palestine are liberated.
Al-Zarqawi, a Jordanian-born militant, is believed responsible for many of the vehicle bombs in recent months and for the death of U.S. civilian Nicholas Berg, whose decapitation was videotaped and posted on the Web last week.
Meanwhile, fighting persisted the Shiite heartland in southern Iraq, where American jets bombed militia positions in the city of Nasiriyah early Monday after fighters loyal to radical cleric Muqtada al-Sadr drove Italian forces out of a base there a day earlier. Residents said seven fighters were killed in overnight battles.
U.S. jets also bombed targets in Karbala, witnesses said. The bodies of six militiamen were seen in the streets on Monday. There were intermittent blasts and gunfire overnight in Najaf, al-Sadr's base of operations.