Iraqi police say 25 people have been killed and 40 more wounded by a car bomb at a minibus pickup intersection in Baghdad.

According to Reuters, Baghdad police said the car bomb which exploded during the Thursday morning rush hour in the mainly Shia district of Bayaa, destroyed around 40 vehicles.

"It was a horrible explosion. Many, many people have been killed," said witness Aqeel Kadhim, adding that pickup trucks and ambulances rushed to take away the dead and wounded.

A local journalist at the scene reported seeing at least 20 dead bodies after the explosion which dug a huge carter where the minibuses parked.

Residents could be seen searching the burned out minibuses for bodies. Corpses, some charred beyond recognition, lay twisted on the ground.

The Bayaa area in southwest Baghdad has been a frequent target of car bombs as thousands of the occupying US troops are struggling to secure the city.

Police also told of mortar shells hitting the commercial Shorja district in central Baghdad, killing at least two people and wounding 14 others.

In other events, the British military reported the death of three of its soldiers in a roadside bomb explosion in the southern city of Basra Thursday, saying another soldier was seriously wounded.

"The soldiers were on foot at the time of the blast in southeastern Basra and it is with deep regret that I can confirm three soldiers were killed by an improvised explosive device," spokesman Major David Gell stated.

He added that the troopers were part of a routine convoy heading out of Basra and had dismounted from their armored vehicles in the Al Mutahya district.

The deaths come a day after the former British Prime Minister Tony Blair, a main supporter and architect of the illegal March 2003 US-led invasion of Iraq, was succeeded by Gordon Brown on Wednesday.

Many UK citizens demand Brown to stop the false alliance with the US over Iraq as the British media describe the country`s military situation in Iraq as critical, even though reports are believed to be distorted.

The UK has currently about 5,500 forces stationed in Iraq, 156 of whom have been killed so far.