Insurgents have blown up an oil pipeline near the Iraqi restive town of Iskandiriyah, south of the capital Baghdad, setting it on fire.

"The pipeline, which carries oil to two electricity generation plants, was attacked at 9:30 am (0530 GMT)," said police Lieutenant Mohammed Hussaini.

He added, "The bomb was placed under the pipeline in an area called Mowelha, near the town of Iskandiriyah, 30 kilometers south of Baghdad.

"The explosion has caused a huge fire and firemen are currently battling to quell the blaze," Hussaini also said.

The pipeline transports oil to Baghdad`s Dura electricity plant and to a power station in the town of Musayyib, south of the capital, he added.