Sunni insurgent bombers killed at least 13 people in a predominantly Shia neighbourhood market in Baghdad Saturday, as the U.S. military reported the deaths of seven more soldiers.

The latest market attack capped a week in which more than 150 people, mostly Shias, were slain in bomb attacks in the Sunni insurgents' bid to terrorize Baghdad days before a U.S.-Iraqi military crackdown.

Saturday's bombings employed what has become a classic insurgent tactic. First a suicide car bomber drove into the crowded market stalls in the busy New Baghdad commercial area shortly after noon, then detonated his explosives among the stores and kiosks selling food, clothes, household appliances and birds.

As people rushed to help the victims, a parked car bomb exploded. The 13 killed included two policemen; four officers were among the 42 wounded, police said.

More than 60 bodies found

Death squads, believed to be primarily Shia militiamen, continued their butchery on the other side of Iraq's deepening sectarian divide, with police reporting the discovery of 40 bodies dumped in Baghdad alone.

Two of the victims were women and most of the bodies showed signs of torture, police said.

In all, at least 61 victims of Iraq's sectarian warfare were killed or found dead across the country.
  
Of the seven U.S. service members reported dead on Saturday, two died in Diyala province northeast of the capital on Friday, three in an unspecified location north of Baghdad on Saturday and two in east Baghdad on Thursday.

The latest reported deaths raised to at least 3,079 the number of U.S. service members who have died since the beginning of the Iraq war in March 2003, according to an Associated Press count.

The figure includes seven military civilians. At least 2,471 died as a result of hostile action, according to the military.

U.S. air strikes killed 14 insurgents and destroyed a safe house for foreign fighters during a raid south of Baqouba, 55 kilometres northeast of Baghdad. Two suspects were captured, the military said.

The Americans said the raid had targeted a foreigner they believed responsible for a series of attacks on U.S. and Iraqi forces in the extremely violent Baqouba region.

With files from the Associated Press