About 45 people were also injured in the incident, police officials said.

A police spokesman told the BBC that the blast happened near an Iraqi army checkpoint in the market town, which is north of the capital, Baghdad.

The blast was reported as US Defence Secretary Robert Gates arrived in Baghdad for talks with US military leaders and Iraqi government officials.

The explosion was caused by a suicide bomber driving a pick-up truck laden with six barrels of explosives, Iraqi police told the BBC.

He blew himself up near a checkpoint manned jointly by Iraqi security forces and local guards recruited to join the drive against al-Qaeda and other radical groups.

"It was a suicide car bomber. The attack took place at 1630 (1330 GMT) when the market was very busy," Colonel Issa Ayan, a police official in Salaheddin province, told the AFP news agency.

Some buildings have collapsed and people have been reported missing since the explosion, he said, adding that the death toll may rise as bodies are uncovered from the rubble.

Some reports put the number of dead at 33.

High-level visit

Mr Gates is in Baghdad for talks on US troop levels in the light of what the US sees as the improving security situation in Iraq.

Mr Gates is in Baghdad to meet with Iraqi and US officials

The BBC's Jim Muir in Baghdad said he is likely to be told that the surge in US troop numbers is paying dividends, with all the indicators of violence and its victims generally down but that sustained military, political and economic effort is needed.

Mr Gates will also start talks on a pact to define the future relationship between Baghdad and Washington.

Mr Gates told reporters travelling with him on the plane from Germany to Baghdad that Iraq's political leaders are making progress towards reconciliation.

"They seem to have become energised over the last few weeks," he said, adding that he wants to see "what the prospects are for further success in the next couple of months".

After arriving in Baghdad, he went into a meeting with Prime Minister Nouri Maliki, the top US commander in Iraq General David Petraeus and American ambassador Ryan Crocker.

US officials attribute improved security to the growth of neighbourhood police units and say basic service provision should get better as the security situation improves.

"What's necessary to come behind security... are essential services... part of that is through the central government's distribution of funds into the provinces," US military spokesman Rear Admiral Greg Smith told Reuters news agency.