Relatives grieve over lost loved ones at al-Kindi hospital in Baghdad, Iraq, Monday Jan. 22, 2007. Two nearly simultaneous bombs struck a predominantly Shiite commercial area in central Baghdad, killing at least 78 people and wounding at least 156, said Deputy Health Minister Hakim al-Zamili. [AP]

BAGHDAD, Iraq - A suicide bomber crashed his car into a central Baghdad market crowded with Shiites just seconds after another car bomb tore through the stalls where vendors were hawking DVDs and used clothing, leaving 88 dead Monday in the bloodiest attack in two months.

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The bombings, along with a double bombing that killed 12 people in the town of Khalis, battered Shiites during one of their holiest festivals. The attacks were the latest in a renewed campaign of insurgent violence in advance of a US-Iraqi security operation.

In all, 137 people were killed or found dead across Iraq, including a teacher who was gunned down as she was on her way to work at a girls' school in a mainly Sunni area of Baghdad. The toll also included the bullet-riddled bodies of at least 30 people, apparent victims of death squads largely run by Shiite militias.

An al-Qaida-linked coalition of Iraqi Sunni insurgents claimed its fighters shot down an American military helicopter in a Saturday crash that killed 12 US soldiers. The US military has said the cause of the crash has not been determined.

In Washington, a senior military official said investigators found debris near the scene of the helicopter crash that could be part of a shoulder-fired weapon. The official requested anonymity because the investigation is ongoing.

Monday's explosions, which could be heard a mile away from the banks of the Tigris River, tore through the Bab al-Sharqi market shortly after noon in a clear attempt to kill as many people as possible at a time of day when commuters and shoppers tend to gather there in large numbers.

Witnesses said the force of the blasts sent jagged pieces of the sales stalls hurtling through the crowd. Body parts were strewn on the pavement, and heavy gunfire erupted. Black smoke billowed above the center of the capital.

Rescue workers could be seen hauling away a bloodied man on a wooden cart that vendors use to bring goods to market. His pants had been blown off.

Nearby al-Kindi Hospital and its morgue were filled to capacity. Many of the dead were laid out in the courtyard, covered with white and blue cloths, as loved ones crouched beside them shrieking in grief and shouting oaths against the attackers.

Hours later, a bomb struck a market in the predominantly Shiite town of Khalis, 50 miles north of Baghdad, and a mortar shell slammed into the market. At least 12 people were killed and 29 wounded, police said.

Khalis is in the volatile Diyala province, where fighting has raged for weeks among Sunni insurgents, Shiite militiamen and US and Iraqi troops.

In the provincial capital of Baqouba, state television reported that gunmen attacked the mayor's office, ransacking the building and setting off explosives that damaged the structure. Police said the mayor was kidnapped, a report that US officials said they could not immediately confirm.

The twin bombing in Baghdad was the single deadliest attack against civilians in Iraq since Nov. 23, when suspected al-Qaida in Iraq fighters attacked the capital's Sadr City Shiite slum with a series of car bombs and mortars that struck in quick succession, killing at least 215 people.

Prime Minister Nouri al-Maliki, a Shiite, denounced Monday's attack and blamed Sunnis. "The alliance of the terrorists and the remnants of Saddam have committed an ugly crime," he said in a statement.

Brig. Jihad al-Jabiri, director of the explosives experts department in the Interior Ministry, told state television that each car apparently carried more than 190 pounds of explosives.

Deputy Health Minister Hakim al-Zamili said at least 78 people were killed and 156 were wounded, but police and hospital officials put the death toll at 88.

The attack occurred two days after the start of the 10-day festival leading up to Ashoura, which marks the death of Imam Hussein, grandson of the Prophet Muhammad and one of the most revered Shiite saints.

Imam Hussein died in the battle of Karbala in A.D. 680. The battle cemented a schism in Islam between Shiites and Sunnis, a division that has grown in Iraq since the US-led invasion in 2003. The festival culminates next week with processions and ceremonies, including self flagellation, in a show of grief to mark Hussein's death in battle.

Late Monday, the US military announced it had launched a joint drive with Iraqi forces into a dangerous Sunni neighborhood in north Baghdad, a region that has seen significant violence in the sectarian warfare shaking the capital.

It was unclear if the operation marked the beginning of the security drive that al-Maliki and President Bush announced this month.

Bush has committed an additional 21,500 troops to the effort to secure Iraq, but congressional Democrats, mindful of a rising US military death toll, oppose this move.

A US soldier was killed Monday by a roadside bomb in northern Iraq, raising to 28 the number of American troops killed in the past three days; the US military also reported that two Marines were killed Sunday in Anbar province.

Al-Qaida's deputy leader, Ayman al-Zawahri, mocked Bush's plan to send more troops, challenging him to send "the entire army" and vowing in a new videotape that insurgents will defeat them. The Washington-based SITE Institute, which tracks al-Qaida messages, said Monday it had intercepted the video, which had not been posted on Islamic militant Web sites.

The success of the new security plan is strongly linked to the Iraqi government's willingness and ability to take on Shiite militias and death squads. Past operations to end violence in the capital failed when al-Maliki intervened on behalf of his fellow Shiites.

In a rare statement that singled out the feared Mahdi Army of radical Shiite cleric Muqtada al-Sadr, the American military announced that US and Iraqi forces captured 16 Shiite militia leaders and 33 key Sunni insurgents in the past 45 days. The military said 52 operations since Dec. 8 targeted the Mahdi Army, which has been blamed for much of the sectarian violence in the capital, while 42 focused on Sunni extremists.

US and Iraqi military officials also detailed a recent operation near Baqouba in which they said 100 Sunni insurgents were killed and 50 captured.