Another 15 Iraqis, including two women and a child, were wounded in the blast, which occurred some 200 metres from a mosque in the New Baghdad district.

"A 22nd Signal Brigade soldier was killed today in eastern Baghdad at approximately 9:20 am," the coalition said.

"The soldier was traveling in a three-vehicle convoy when an improvised explosive device detonated between the first and second vehicles.

The statement did not mention US wounded.

Witnesses had earlier reported seeing at least one US soldier covered in blood and as many as three hurt before the convoy drove away from the devastation.

Blood, pieces of flesh, discarded clothing and shoes littered the street, an AFP reporter at the scene said.

Ahmed Ali, a sweets seller, said: "It's a cowardly act. They hurt one American but they killed and wounded far more Iraqis. I saw one American soldier badly wounded and covered in blood.

"When it exploded the street was blocked with traffic. People in a small truck were killed or wounded as well as some passers-by. The place was packed and all shops open and people selling their wares on the pavement."

Allwan described how two US army vehicles slowed as they approached a red light.

"The first went past the explosive device hidden in the central reservation but it exploded as the second Humvee arrived. The blast was very strong, blowing in all the windows.

"Three Americans seemed to be hurt," he said. "There were women lying in the floor.

The nearby Al-Kindi hospital took in first casualties.

"About 10 this morning we received three dead... and 13 wounded," said Karim Abdullah Muslim, head of the emergency room.

"Two or three of them are seriously wounded. The rest are slight injuries.

"A woman was among the dead and three women were also wounded. Two childen were lightly injured," he said.

Another dead man was taken to the capital's neurological hospital along with two wounded, an AFP correspondent said.

Earlier, a US military spokesman had said two bomb attacks hit US convoys in Baghdad, but gave no details.

The latest attack came as plans gathered steam to deploy former armed opponents of Saddam Hussein to quell the bloody insurgency, with Iraq's interim leadership lining up behind the United States in calling for a Nato role to help restore security.