A car bomb exploded in the Iraqi capital on Monday, killing at least 21 people and wounding 43 others in a mainly Shia district in southwestern Baghdad.

The attack - as Prime Minister Haider al-Abadi met US President Donald Trump in Washington, DC - targeted a busy commercial district of the Hay al-Amel suburb, according to police and hospital officials.

There was no immediate claim of responsibility for the explosion, which bore all the hallmarks of a suicide attack by the Islamic State of Iraq and the Levant (ISIL, also known as ISIS) group.

The group is under assault in both Iraq - in the country's second city of Mosul, which ISIL seized in June 2014 - and in neighbouring Syria.

ISIL took vast swaths of Iraqi territory north and west of the capital in 2014.

Iraqi government forces backed by the US-led international coalition have since retaken many cities, including Tikrit and Fallujah.

But as ISIL has lost ground in Iraq, it has also retained the ability to stage regular attacks there.

Iraqi troops are now closing in on Mosul's Old City, where some of the fiercest fighting is expected to unfold.

The militarised federal police say they are some 500 metres from al-Nuri mosque, where ISIL leader Abu Bakr al-Baghdadi made a rare public appearance in July 2014, announcing a self-styled caliphate in Iraq and Syria.

ISIL fighters on Monday captured an Iraqi police colonel and eight other officers in western Mosul after they ran out of ammunition during fierce early morning clashes.