A car bomb ripped through a crowded marketplace in Sadr City, a politically sensitive but impoverished district of Shia zealots, leaving at least 15 people dead and 33 wounded, a security official said.

The district is a regular target for Sunni extremists in the bitter sectarian conflict rocking the Iraqi capital.

Iraq's biggest bomb attack was also in Sadr City -- which has thousands of young followers of radical Shia cleric Moqtada al-Sadr -- last November in which 202 people died.

Wednesday's attack came a day after 70 people were killed and 138 wounded in a double bombing outside the renowned Mustansiriyah University which lies near Sadr City.

Shocked and angry students Wednesday staged a protest in the central Karada district against the university bombing and demanded more protection for students and professors.

Some held banners protesting the deadliest violent attack in the war-torn country this year, while others shouted slogans demanding that universities be protected.

Police sealed off the Mustansiriyah university campus as the education ministry ordered three days of mourning and told its institutions to conduct prayers for the victims.

Dozens of Iraqis were seen donating blood for the victims of the attack.

Prime Minister Nuri al-Maliki warned of stern action against criminals and "death squads."

"We will clean Baghdad from terrorists and outlaws," he said in a meeting with foreign ambassadors based in Baghdad.

"There will be no safe haven for anyone in Baghdad and we will rigorously pursue terrorists and death squads."

Many in the violence-wracked capital had been expecting a major attack in the wake of the December 30 botched execution of Saddam Hussein, who was taunted by a guard, allegedly a Shia, in his final moments.

Sunni sentiment was further affected by the hanging of two Saddam aides on Monday, in which one was decapitated during the hanging process.

An Iraqi official said the attack on the university aimed to further inflame already bitter Shia-Sunni sectarian passions.

"The area where the university is located was until recently controlled by the Mahdi Army," he said referring to the Shia militia loyal to cleric Sadr and which is accused of killing Sunni Arabs.

Speaking on condition of anonymity he suggested further that the bombings were an attempt to trigger a backlash from the militias.

On Tuesday, US President George W. Bush told PBS television in an interview that Saddam's execution had looked like a "revenge killing."

"When it came to execute him (Saddam), it looked like it was kind of a revenge killing. And it sent a mixed signal to the American people and the people around the world," he said.