BAGHDAD -- A bomb exploded inside Sadr City's district council building Tuesday, killing 10 people, including four Americans working to restore local government and services in the former Shiite militia stronghold.
Iraqi officials said it appeared to be an inside job, and suspicion fell on the headquarters' Shiite guard force. The blast was the second deadly attack to strike Americans promoting municipal governments in as many days.
The attack comes as U.S. military and civilian officials step up efforts to take advantage of a sharp drop in violence to promote the local administration and restore services in Sadr City and other areas. Failure to do so could allow Sunni and Shiite extremists to regain a foothold, U.S. commanders believe.
The increased presence of the Americans in local communities has made them more vulnerable to attacks. But U.S. commanders believe that's key to a strategy that has helped drive down the levels of violence to the lowest point in more than four years.
Secretary of State Condoleezza Rice called Tuesday's bombing "a terrible reminder of the dangers that our colleagues face daily in advancing our critical foreign policy goals."
Two of the U.S. dead were soldiers, as was one of the wounded, the military said. U.S. Embassy spokeswoman Mirembe Nantongo said the dead American civilians included one State Department and one Defense Department employee.
The State Department identified one of the slain Americans as Steven L. Farley of Guthrie, Okla. He was believed to be the first member of a provincial reconstruction team to be killed in Iraq.
The U.S. aid teams have been dispatched to teach, coach and mentor Iraqis and help them with reconstruction projects.
An Italian of Iraqi origin who was working as an interpreter for the Americans also was killed, according to the Italian Foreign Ministry.
Five Iraqi civilians also died, the U.S. military said. But an Iraqi Interior Ministry official, speaking on condition of anonymity, said four Iraqi civilians were killed and 10 others wounded. The discrepancy could not immediately be reconciled.
The bomb exploded in the deputy council chief's office where Iraqis and Americans were gathering about half an hour before a weekly meeting to elect a new chairman, officials said.
Council spokesman Ahmed Hassan said the blast took place as the Americans entered the room and started talking with the deputy council chief. The council chief, Hassan Hussein Shammah, was wounded in the leg.
The spokesman said the hall was filled with smoke, dust and shattered glass.
"I was about to enter the room when strong hot wind and dust knocked me backward into a different room," Hassan said. "I heard the scream of the wounded people asking for help. We rushed inside the blast site and took the wounded to the hospital in our private cars."
Four council members were among the wounded, he said.
Another council member, Jawad al-Itabi, was meeting in an adjacent office with displaced Sadr City residents who had fled the recent fighting but wanted to return to the district.
"I rushed in my wheelchair outside the room to see some of my colleagues wounded and being taken away by policemen. For their part, the American soldiers were taking care of their casualties," al-Itabi said.
The district council headquarters is located in a heavily guarded southern section of Sadr City that is surrounded by a U.S.-built concrete wall and is largely controlled by U.S. and Iraqi troops.
While U.S.-backed Iraqi security forces have gained control of much of Sadr City -- a sprawling impoverished area that houses some 2.5 million people -- the Americans have largely limited their activities to the southern section.
U.S. troops captured a suspect who was trying to flee the scene, the military said, claiming he tested positive for explosives residue. The military blamed the attack on "special groups criminals," a term it uses for Shiite militiamen refusing to follow a cease-fire order by anti-U.S. cleric Muqtada al-Sadr.
A witness said the Americans rounded up all the Iraqi guards at the building immediately after the explosion.
An initial investigation indicated the explosion was an inside job and that the bomb was likely planted on Monday to avoid the tightened security which accompanies the weekly Tuesday meetings, an Interior Ministry official said.
Policemen and guards insisted that no unauthorized people had entered the office on Tuesday, the official said, speaking on condition of anonymity.
A senior official in Sadr City, who also declined to be identified, said there were bitter rivalries over who should lead the council. The current chairman has been in the post for more than eight months and other members had called the election to replace him, according to the official.
The explosion occurred a day after a suspected Sunni gunman opened fire on U.S. soldiers attending a municipal council meeting in Madain, about 14 miles southeast of Baghdad, killing two of the American troops and wounding three others. An interpreter also was killed in that attack.
In other violence reported by police and hospital officials on Tuesday, gunmen killed the head of the local council who was linked to al-Sadr's movement in Abu Dshir, a Shiite enclave in the mainly Sunni area of Dora in southern Baghdad.
A suicide car bomber also struck a market area in the northwestern city of Mosul, killing two people including a child. Seventy people were wounded, a Mosul police official said.
Like the other Iraqi officials, he spoke on condition of anonymity because he was not authorized to release information.
Associated Press writer Sameer N. Yacoub contributed to this report.