Bomb kills 32 in Iraq as U.S. troops leave

By Tim Cocks and Muhanad Mohammed

BAGHDAD (Reuters) - Hours after U.S. troops handed over control of Iraq's cities to its domestic security forces, a car bomb in the northern city of Kirkuk killed at least 32 people and wounded more than 100 on Tuesday, police said.

The blast tore through a busy market in a largely Kurdish part of the city, which is regarded as a potential flashpoint between ethnic Kurds, Arabs and Turkmen.

The U.S. pullback to rural bases from towns and cities is the first step toward a full U.S. withdrawal by 2012 agreed under a bilateral security pact.

Some Iraqis fear it leaves them open to attack by insurgent groups but many Iraqis celebrated what the government named "National Sovereignty Day," more than six years after the U.S.-led invasion to topple Saddam Hussein.

Citizens and Iraqi soldiers drove around the streets of the capital in vehicles draped in flowers and Iraqi flags. Signs were draped on Baghdad's many concrete blast walls reading "Iraq: my nation, my glory, my honor."

"This day, which we consider a national celebration, is an achievement made by all Iraqis," Prime Minister Nuri al-Maliki said in a televised address.

"Our incomplete sovereignty and the presence of foreign troops is the most serious legacy we have inherited (from Saddam). Those who think that Iraqis are unable to defend their country are committing a fatal mistake."

The day's festivities included a parade in Baghdad's heavily fortified Green Zone government and diplomatic district, viewed by Iraqis as the ultimate symbol of the foreign military presence until local forces took control of it in January.

In a display of the military muscle Iraq will use to combat a stubborn insurgency, thousands of soldiers and police paraded on foot or in U.S.-donated Humvees, armored cars and tanks in a compound where Saddam's forces once staged elaborate displays.

U.S. and local officials said the pullback of U.S. troops showed how far the country had come since it was almost torn apart by tit-for-tat sectarian killing in 2006/2007.

But the Kirkuk bomb underscored the fragility of the security gains. Iraq is less violent that it has been for years, but militants still stage frequent attacks.

In Washington, U.S. President Barack Obama lauded the U.S. troop withdrawal as an important milestone but warned of "difficult days" ahead.

Frantic relatives of those who had been in the area dug through the rubble in Kirkuk, searching for missing loved ones.

"I went to the market to get some bread and there was a huge explosion," said Taseen Azad, 21, who was lightly wounded. "I saw people falling on the ground, shops burning and dead people. Then someone took me to the hospital."

The U.S. military said four U.S. soldiers based in Baghdad had died of combat-related injuries on Monday.