At least 26 Iraqis, almost all of them children, have been killed by a suicide car bombing in south-eastern Baghdad.
Most of the victims were children, the US military says
A US soldier is also said to have died in the blast. Another three US soldiers are reported to have been injured.
A car drove up to a US army vehicle and blew up as troops gave sweets to the children, a witness said.
Hundreds of Iraqis have died in attacks by militants opposed to the US presence and a Shia-led government that took charge in Baghdad earlier this year.
'Pools of blood'
"Many Iraqi civilians, mostly children, were around the Humvee at the time of the blast," US military spokesman Sgt David Abrams told the Reuters news agency.
Another witness told the AFP news agency: "Children gathered round the Americans who were handing out sweets.
"Suddenly a suicide car bomber drove round from a side street and blew himself up," he said.
A television cameraman working for the Reuters agency said nearby houses had been demolished by the explosion and pools of blood collected in the street.
The blast is said to have taken place as the US patrol was passing through Baghdad's eastern al-Jedidah district which is populated mainly by Shia Muslims.
At the nearby Kindi hospital, correspondents say hundreds of distraught relatives wandered along the blood-soaked corridors shouting and screaming as they looked for their children, many of whom were badly mutilated.
An official said the bodies of 24 children had been delivered to the mortuary.
US troops often hand out sweets to befriend Iraqi children
Abu Hamed, who lost his 12-year-old son in the blast, told the AFP news agency he was at home when he heard the explosion.
"I rushed outside to find my son. I only found his bicycle," he said.
He said he found his son at the Kindi hospital mortuary.
"I recognised him from his head. The rest of the body was completely burnt."
A bomb blast in Baghdad in September last year killed at least 34 children.
This attack also saw the victims gather round US troops who were handing out sweets, to mark the opening of a water treatment plant.