* Tensions rise as Shi'ites gather for imam's birthday
* June was one of bloodiest months since U.S. withdrawal (Adds governor of Diwaniya, details)
By Imad al-Khuzaie
DIWANIYA, Iraq, July 3 Bombs killed at least 44 people at markets in Iraq on Tuesday, and authorities said they bore the hallmarks of sectarian attacks on Shi'ite Muslims by al Qaeda Sunni militants.
A bomb in a small truck exploded in a market in the city of Diwaniya, killing 40 people, and other blasts killed four more near the city of Kerbala, police and officials said.
The Diwaniya bombing was near a Shi'ite mosque where pilgrims gather on their way to Kerbala to celebrate the birthday of one of their most important imams, al-Mahdi, this week.
Police announced a partial curfew and blocked all entrances to Diwaniya, 150 km (90 miles) south of Baghdad and 130 km southeast of Kerbala. Police sources said 75 people had been wounded.
"All of a sudden the explosion happened, I felt the power of the blast, it was so strong, it broke all the glass in my windows," butcher Ahmed Hassan, 23, said in his shop.
"I smelled blood and gunpowder."
He said a fellow shopkeeper had been taking dead bodies to the hospital morgue.
"We even saw body parts on the top of building, we took them down," said Hassan, looking pale and confused as he swept glass from his shop floor.
Shoes, toys and vegetables were scattered across the ground and at least 15 shops were destroyed. Two burnt-out vehicles stood near the site of the explosion. Witnesses said the bomb appeared to have been planted in a delivery truck.
Earlier in the day, two bombs in a vegetable wholesale market killed four people and wounded 29 near the central Iraqi city of Kerbala, hospital and police sources said.
"The bombing happened because of sticky bombs attached to two parked cars which went off separately," said Hussein Shadhan, a provincial council member, who was at the hospital.
"Four of the wounded people are seriously injured and their medical situation is very critical."
Reuters pictures showed pulverised vegetables covering the blackened market floor. People picked their way through twisted pieces of metal and smashed wooden crates.
Hospital and police sources said earlier they believed the attack had also been targeting Shi'ite pilgrims on their way to Kerbala.
"Initial investigations show that today's bombs bear the fingerprints of al Qaeda terrorist group," Salim Hussain, governor of Diwaniya, told Iraqiya state television.
Iraq's al Qaeda wing has claimed responsibility for some of the recent bombings against Shi'ites.
Last month at least 237 people were killed and 603 wounded in attacks, mainly bombings, according to a Reuters tally, making June one of the bloodiest months in Iraq since U.S. troops withdrew at the end of last year.
The deadliest attack occurred on June 13 when bombers targeting Shi'ite pilgrims killed more than 70 people.
Sunni insurgents often attack Shi'ite targets to try to reignite sectarian violence that killed tens of thousands of people in 2006-2007. (Additional reporting by Suadad al-Salhy, Ali al-Rubaie, Ahmed Rasheed and Aseel Kami; Writing by Sylvia Westall; Editing by Andrew Roche)