The suicide attack occurred about 8:30 p.m. Sunday in the outdoor market in Tuz Khormato, a mostly Turkomen city 130 miles north of Baghdad, Maj. Gen. Anwar Mohammed Amin said.
The powerful blast collapsed the ceiling of the one-story cafe, burying many of the victims, witnesses said. Hours afterward, rescuers were still sifting through the debris looking for the dead or injured. Authorities used mosque loudspeakers to appeal for blood donations.
One of Iraq's main ethnic groups, Turkomen follow both the Sunni and Shiite traditions of Islam. Amin said Shiites favored the cafe because it was near a Shiite mosque. But friction exists among Iraq's Turkomen and Kurdish populations, and the motive for the attack was unclear.
In other developments:
Given the gravity of the allegations, U.S. officials believe that a vigorous prosecution is essential and that punishment should be severe if the six troops and one former soldier are convicted.
Anything short of that would be seen by Iraqis as a cover up and could shatter remaining support for the U.S. presence here.
Five soldiers from the 101st Airborne Division areAbeer al-Janabi near the town of Mahmoudiya on March 12. A sixth soldier is accused of failing to report the crime.
The soldiers allegedly saw the victim at a checkpoint in the town and plotted the attack for a week, according to federal court documents. Three of her family members were killed in the assault.
But the victim's male relatives have refused to allow her body to be exhumed because of objections from a local Muslim cleric. Islamic law frowns on exhumations as desecration of the dead.
"Chief among our concerns is carrying out justice. But when you get town officials or an imam saying that exhuming the body doesn't jive with our cultural sensitivities, that creates a massive stumbling block," a U.S. military official in Baghdad close to the investigation said, speaking on condition of anonymity because he is not authorized to speak to media.
Without forensic evidence, prosecutors must rely heavily on statements from the suspects. Defense lawyers will doubtless claim those statements were made under duress and seek to keep them from the jury.
While some evidence has been collected at the home where the assault allegedly occurred, officials say none of it confirms guilt.
"There is certainly enough evidence to get us into court. It remains to be seen whether the evidence that has been collected thus far is enough to carry us to a capital conviction," the U.S. official said.
The soldiers, Sgt. Paul E. Cortez, Spc. James P. Barker, Pfc. Jesse V. Spielman and Pfc. Bryan L. Howard, are accused of rape and murder. They are thought to have conspired with former soldier Steven D. Green, who was arrested in the case last month in North Carolina.
Green, who was discharged from the Army because of a personality disorder, likely will be tried in federal court. The former Army private pleaded not guilty to one count of rape and four counts of murder and is being held without bond.
Sgt. Anthony W. Yribe, is charged with failing to report the attack but is not alleged to have been a direct participant.
Those still on active duty face an Article 32 hearing, the military equivalent of a grand jury proceeding, to determine if they should stand trial. If the case does go to trial, the murder suspects could face the death penalty.
The U.S. military always has insisted it will punish soldiers who commit crimes against Iraqis. During a visit last week, Defense Secretary Donald H. Rumsfeld underscored that position, insisting that "no one" in the U.S. force "is immune," meaning from U.S. though not Iraqi prosecution.