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A car bomb ripped through a packed food market north of Baghdad killing 32 people on Thursday, as the year's death toll topped 5,800 amid a surge in violence nationwide.
The flare-up has prompted Baghdad to appeal for international help in fighting the country's worst bloodshed since 2008, just months before Iraq's first general election in four years.
Officials have voiced concern over a resurgent al Qaeda emboldened by the civil war in neighbouring Syria which has provided the jihadist network's front groups with increased room to plan and carry out attacks in Iraq.
Thursday's attack came a day after a spate of attacks, most of them car bombs targeting Shiite neighbourhoods of Baghdad, killed 59 people and wounded more than 100 in Iraq's highest death toll of the month.
The latest bombing struck around noon (0900 GMT) near a cafe in a food market in the town of Saadiyah, in ethnically mixed Diyala province northeast of Baghdad.
At least 32 people were killed and 40 wounded in the blast, a police colonel and a doctor said, both speaking on condition of anonymity.
Saadiyah is populated mostly by Faylis, or Shiite Kurds, and lies in a tract of territory that Kurdish leaders want to incorporate in their autonomous region in the north over the objections of the central government.
Militants frequently exploit poor communication between Kurdish and central government security forces to carry out attacks.
On November 14, a suicide bomber targeted a group of Shiite pilgrims in the town on the anniversary of the death of a venerated figure in Shiite Islam, killing 32 people.
Another blast in Diyala on Thursday killed one person, officials said.
Authorities also found the bodies of a dozen residents snatched by kidnappers purporting to be members of the security forces.
The 12 were executed and their bodies thrown into a nearby river, reminiscent of targeted killings that were rampant during the worst of Iraq's sectarian bloodshed in 2006 and 2007.
No group has claimed responsibility for the violence, but Sunni militants linked to al Qaeda often carry out such attacks, ostensibly to undermine confidence in the Shiite-led government and security forces.
Working towards a 'failed state'
"Their capability to conduct attacks has increased," Deputy National Security Adviser Safa Hussein told AFP in a recent interview, referring to the Islamic State of Iraq and the Levant, an al Qaeda front group.
"By now they understand they can't realise their ambition in establishing a state. Nor can they defeat the government.
"But they can work towards their goal in establishing indirect control in some of the areas, and making the state a failed state, which is a very good environment for them to flourish."
The unrest is part of a surge in bloodshed that has pushed violence to its highest level since 2008, when Iraq was recovering from the worst of its Sunni-Shiite sectarian war.
More than 5,800 people have been killed so far in 2013, according to an AFP tally based on reports from security and medical officials.
Prime Minister Nuri al-Maliki has called for Washington's help in the form of greater intelligence sharing and the timely delivery of new weapons systems.
But diplomats and analysts say the government is not doing enough to address the root causes of the unrest, particularly frustration within the Sunni Arab minority, which complains of mistreatment by the Shiite-led authorities.
With elections due on April 30, officials fear the level of violence could rise further as militants seek to destabilise the country ahead of the polls.
In addition to failing to stem the bloodshed, authorities have also struggled to provide adequate basic services such as electricity and clean water, and corruption is widespread.