UPDATE 1: US military says deadly car bombing at bus stop carried out by Shi'ite militiamen.
The US military said on Wednesday that a deadly car bombing at a Baghdad bus stop was carried out by Shiite militiamen and not by Sunni militants loyal to Al-Qaeda.
The casualty toll from Tuesday's attack in the Shi'ite Al-Hurriyah neighbourhood of north Baghdad meanwhile rose to 63 dead and more than 70 wounded.
The US military said its intelligence indicated that the bombing was carried out by a renegade Shi'ite militia cell led by Haydar Mehdi Khadum Al-Fawadi in a bid to stop the resettlement of Sunni Arabs in the neighbourhood.
"We believe the attack was not conducted by AQI (Al-Qaeda in Iraq)," military spokesman Lieutenant Colonel Steven Stover said in a statement.
"Though vehicle-borne improvised explosive devices are a trademark of AQI, our intelligence, corroborated through multiple sources, is this atrocity was committed by a Special Groups cell led by Haydar Mehdi Khadum Al-Fawadi."
The US military uses the term Special Groups to refer to Shi'ite extremists, particularly renegade members of the Mahdi Army militia of Shi'ite radical leader Moqtada Al-Sadr.
Stover said Fawadi ordered the attack to "incite Shia violence against Sunnis". He added that "his intent was to disrupt Sunni resettlement in Hurriyah in order to maintain extortion of real estate rental income to support his nefarious activities".
Stover said evidence gathered by the military indicates that the vehicle used in the bombing was a truck loaded with up to nearly 140 kilogrammes of an unknown bulk explosive.
"The type of vehicle and material lead us to ascertain this was not AQI," he said.
Prime Minister Nuri Al-Maliki also refrained from pointing the finger at Al-Qaeda for the attack, saying only that it was the work of the "remnants of defeated terrorism".
"This crime will not affect our determination... to defeat terrorists and fully preserve the gains achieved by the security forces and to rid the capital and the provinces of the remnants of terrorists, murderers and outlaws," he said in a statement.
The late afternoon attack on Tuesday left several nearby buildings and vehicles burnt.
Those dead in the bombing included five women and four children, Iraqi officials said, adding the wounded included 11 women and more than 10 children.
It was the biggest attack in Baghdad since March 7, when 68 people were killed in twin bombings.
The deadliest in the Iraqi capital this year was a February 1 attack in which two female bombers blew themselves up at two pet markets, killing at least 98 people and wounding more than 200.
Baghdad has seen a decline in violence in recent months but the city was rocked by intense fighting between security forces and Shi'ite militiamen loyal to Al-Sadr earlier this year.
Hundreds of people were killed in the clashes that ended after a ceasefire was ordered by Al-Sadr on May 10.