Suicide blasts kill 26 at Iraqi state-sector bank

Iraqi soldiers inspect the site of a bomb attack in Baghdad June 20, 2010. Suicide car bombers attacked the Trade Bank of Iraq on Sunday, killing at least 26 people, an Interior Ministry source said.

BAGHDAD (Reuters) - Two suicide bombers detonated cars laden with explosives outside the Trade Bank of Iraq on Sunday, killing 26 people in the latest attack to raise concerns about the nation's stability after an inconclusive election.

Fifty-three people were wounded in the blasts that blew in the windows of the bank, one of the public sector's most active financial institutions and at the forefront of efforts to encourage foreign investment as the sectarian bloodshed set off after the 2003 U.S.-led invasion fades.

A week earlier, gunmen and suicide bombers laid siege to the central bank in Baghdad, killing 18 people and fueling fears that insurgents are trying to exploit a political vacuum that followed the March 7 election which produced no outright winner.

Baghdad security spokesman Major General Qassim al-Moussawi said two cars packed with around 80 kilograms of ammonium nitrate each were driven at the gates of the Trade Bank of Iraq and detonated on striking blastwalls protecting the building.

He put the initial death toll at 18, but an Interior Ministry source said later it had risen to 26.

The blasts left two charred craters a few meters apart in the main thoroughfare in front of the bank.

The building was badly damaged. Five guards were killed and six wounded, said bank chairman Hussein al-Uzri in a statement. "However, this cowardly attack was a failure. The Trade Bank of Iraq, and Iraq itself, are undeterred," Uzri said.

A bank employee who asked not to be identified said the damage and toll would have been worse had guards not protected it and its windows not consisted of shatterproof glass.

At least two of the dead were police officers guarding a nearby Interior Ministry office that issues Iraqi identity cards, ministry sources said.

"I feel so sorry for what is happening to my country," said Mahmoud Asi, who was wounded along with his wife in the blast near his home. Blood stained his clothes. "All the bank's guards were killed," he said.

AL QAEDA?

Security officials blamed the June 13 central bank attack on Sunni Islamist insurgents linked to al Qaeda, saying they were trying to prove they remained potent after suffering significant blows this year, including the killing of their Iraq leaders.

They said that attack was also an attempt to reignite violence between majority Shi'ites and once dominant Sunnis after the election, which has yet to produce a new government.

There was no immediate claim of responsibility for Sunday's assault on the Trade Bank of Iraq, but suicide bombings are a hallmark of al Qaeda and other Sunni Islamist groups. Moussawi told local television al Qaeda was suspected.

Overall violence has dropped sharply since the all-out sectarian warfare of 2006-07, but shootings and bombings continue daily, frequently targeting security forces, officials or former Sunni insurgents who switched sides.

The political uncertainty since the election threatens to muddy U.S. intentions to end combat operations in August ahead of a full U.S. withdrawal by the end of 2011.

While there was no outright election winner, a merger of the main Shi'ite-led coalitions in the new parliament is expected to squeeze out the vote leader, a cross-sectarian alliance heavily backed by Sunnis, in the competition to form a government.

The leader of the cross-sectarian Iraqiya list, former Prime Minister Iyad Allawi, has warned that frustration among Sunni voters could lead to increased violence if he is sidelined.

(Writing by Michael Christie and Matt Robinson; Editing by David Stamp)