Car bombs tore through a fruit and vegetable market in a Shi'ite area of central Baghdad on Saturday, killing atleast 51 people in another devastating attack fueling a vicious cycle of sectarian violence.
The bombing came two days after President Bush met Iraq's prime minister to discuss ways to avert an all-out civil war and 10 days after the bloodiest attack since the US invasion killed more than 200 people in the capital.
It coincided with a report that Defense Secretary Donald Rumsfeld told the White House before announcing his resignation last month that the administration's Iraq strategy was not working and proposed a battery of changes including possible troop reductions.
"In my view it is time for a major adjustment. Clearly, what US forces are currently doing in Iraq is not working well enough or fast enough," Rumsfeld said in the classified memo, dated November 6, obtained by The New York Times.
The Pentagon confirmed the memo's authenticity but declined further comment.
Rumsfeld outlined several options in the memo for policy changes, including reductions in US forces and bases in Iraq as well as a recasting of the US mission and goals there, but he endorsed no specific recommendations.
His language was echoed in remarks Bush made on November 8 when he announced Rumsfeld's resignation the day after Democrats won control of Congress in elections dominated by voter unhappiness over the Iraq war. Bush said it was time for a change in Iraq and Iraq policy was "not working well enough, fast enough".
Rumsfeld, who has publicly voiced confidence over US strategy in Iraq, remains in charge at the Pentagon until his successor, former CIA chief Robert Gates, is confirmed by the Senate.
Bush, under pressure to change course in Iraq, pledged in his weekly radio address on Saturday to seek bipartisan consensus on the way forward.
In Baghdad, angry locals screamed in rage against Saddam Hussein's Baath party and speculated Sunni insurgents may have planted the bombs in retaliation for a raid on a nearby Sunni rebel stronghold on Friday by Iraqi and US troops.
Three Huge blasts minutes apart
A resident spoke of three huge blasts going off in the space of two or three minutes, sending black smoke billowing through the narrow lanes of the old Sadriya quarter and leaving a scene of carnage and devastation.
A dozen cars were charred and market stalls were burned out.
Sources at police headquarters and the Interior Ministry said 51 people were killed and 90 people wounded.
"The first explosion shook the area and a large piece of shrapnel landed near me. I saw people carrying bodies and dazed people running in all directions," said the resident, who asked to remain anonymous.
"My brother! My brother!" one man screamed as he tried in vain on his mobile phone to raise a relative who had been shopping nearby.
On Friday, Iraqi and American troops stormed the Fadhil area of the old quarter, backed by US attack helicopters, and fought suspected Sunni militants for several hours.
That show of strength came a day after Iraqi Prime Minister Nuri al-Maliki said Iraqi forces would be able to take over from US troops by June 2007.
In talks in Jordan, Bush strongly backed him as the "right guy" and agreed to speed up training of Iraqi troops so they could take responsibility more quickly.
Among the proposals outlined in the Rumsfeld memo were positioning substantial US forces near the Iranian and Syrian borders to stem infiltration and reduce Iranian influence on the Iraqi government.
The White House said Bush would meet one of the most powerful Shi'ite leaders in Iraq, Abdul Aziz al-Hakim on Monday and the Sunni vice president later this month as he seeks to become more directly involved in calming sectarian tensions.
Hakim on Saturday brushed aside the sectarian violence as politically inspired and rejected a call by UN Secretary General Kofi Annan for an international summit on Iraq, saying the "solution is from Baghdad, not conferences outside Iraq."
Next week, an independent bipartisan group will recommend to Bush US troops pull back into their bases in Iraq in more of a support role, while providing training and equipment for Iraqi forces and preparing for a gradual withdrawal.
Bush has indicated he will look closely at -- but not necessarily heed -- the findings of the independent Iraq Study Group. Internal White House and Pentagon reviews are also nearing completion.
"I want to hear all advice before I make any decisions about adjustments to our strategy in Iraq," he said on Saturday, while insisting that his objective remained a democratic Iraq, something analysts say is increasingly unrealistic.