BAGHDAD (AP)- A suicide car bomber sped towards American soldiers as they distributed sweets to children and detonated his vehicle on Wednesday, killing up to 27 other people, U.S. and Iraqi officials said. One U.S. soldier and about a dozen children were among the dead.

At least 21 others, including three U.S. soldiers, were injured in the attack, the second major suicide bombing in Baghdad this week. Twenty-five people were killed on Sunday when a suicide attacker struck at an army recruiting center.

The fireball from the Wednesday blast also set a nearby house on fire, the U.S. military said. The attack stunned the impoverished east Baghdad neighborhood of mostly Shiite Muslims and Christians.

An elderly woman dressed in traditional black beat her chest in front of her house in grief.

&#34There were some American troops blocking the highway when a U.S. Humvee came near a gathering of children, and U.S. soldiers began to hand them sweets,&#34 said Karim Shukir, 42. &#34Then suddenly, a speeding car bomb showed up and struck both the Humvee and the children.&#34

Hospitals and police said between 11 and 13 children were killed.

Authorities scrambled to compile an accurate count of the dead and injured. &#34The explosion was mainly on the children,&#34 resident Abbas Ali Jassim said.

Last September, 35 Iraqi children were killed in a string of bombs that exploded as American troops were handing out sweets at a government-sponsored celebration to inaugurate a sewage plant in west Baghdad. It was the largest death toll of children in any insurgent attack since the start of the Iraq conflict.

However, many of the families of children killed in the September attack blamed the Americans for the tragedy because their presence attracted insurgents to the ceremony.

Following the Wednesday attack, charred remains of an engine block wrapped in barbed wire lay in the street. A child”s bicycle was crumpled beside the street, which was splattered with pools of blood.

At Kindi hospital, where many of the dead and injured were taken, one distraught woman swathed in black sat cross-legged outside the operating room. &#34May God curse the mujahedeen and their leader,&#34 she cried as she pounded her own head in grief.

Hours after the attack, about 200 people turned out for the funeral of five of the victims, in keeping with Muslim tradition that the dead must be buried quickly. The crowd shouted &#34Allahu Akbar&#34, (God is great)and some fired weapons in the air.

A U.S.-Iraqi military operation launched in May has significantly reduced suicide bombings in the capital. But U.S. and Iraqi authorities acknowledge that it is difficult to eliminate such attacks entirely.

In other violence Wednesday, gunmen killed an Iraqi soldier while he was driving his car in western Baghdad, police said. Two other Iraqi soldiers, including one lieutenant, were killed in a gunfight in another west Baghdad neighborhood.

Separately, coalition forces in Baghdad have captured Abu Musab al-Zarqawi”s top lieutenant in Baghdad, Abu Abd al-Aziz, Gen. Richard Myers, the chairman of the Joint Chiefs of Staff, said Tuesday on ”The News Hour with Jim Lehrer”.

Meanwhile, a senior official in Iraq”s Interior Ministry acknowledged Wednesday that up to 10 Sunni Arabs suffocated in a police vehicle while in custody and said those responsible will stand trial.

The incident has angered many Iraqis as tension between Sunnis and the Shiite-dominated government is rising. Their deaths are among many complaints of abusive treatment by Iraq”s U.S.-trained security force.

Nine or 10 Sunni men reportedly suffocated after being held for several hours in a vehicle that lacked oxygen following an attack against an Interior Ministry patrol Sunday in west Baghdad.

Temperatures at the time soared to about 45 C (113 F).

Maj. Gen. Hussein Kamal, the head of intelligence department at the Interior Ministry, said the men appear &#34to have died after the vehicle”s engine was turned off stopping the air conditioning.&#34

Despite the ongoing violence, Prime Minister Ibrahim al-Jaafari said on Tuesday that security in many of Iraq”s 18 provinces, most notably in the Shiite south and the Kurdish-controlled north, has improved so that Iraqi forces could assume the burden of maintaining order in cities there.

&#34We can begin with the process of withdrawing multinational forces from these cities to outside the city as a first step that encourages setting a timetable for the withdrawal process,&#34 al-Jaafari said at a news conference with U.S. Deputy Secretary of State Robert Zoellick.

Iraqi troops are ready to take control of some cities as a first step toward sending home American and other foreign soldiers, al-Jaafari said. But he rejected any timetable for a pullout &#34at a time when we are not ready&#34 to confront the insurgents.

He did not specify which cities could be turned over to the Iraqis. The insurgency is focused in Baghdad and the Sunni Arab heartland of central and northern Iraq. Wide areas of the Shiite south and Kurdish north are relatively peaceful.

Zoellick said Washington was committed to supporting the new Iraqi leadership and that U.S. troop strength &#34will be based on the conditions by which the Iraqi forces are able to meet the effort to deal with the counter insurgency.&#34

The Defense Department wants to pull some troops out of Iraq next year, partly because the commitment is stretching the Army and Marine Corps, perilously thin as casualties mount. U.S. commanders believe the presence of a large U.S. force is generating tacit support for anti-American violence.