Baghdad (AFP) - The Islamic State group claimed responsibility for a suicide car bomb attack that killed at least 32 people Monday in Baghdad.

The jihadist organisation took responsibility for the blast in Sadr City via its propaganda agency Amaq, claiming the "martyrdom operation" had killed around 40 people.

Iraqi police sources said at least 32 people were killed and more than 60 wounded when an explosives-laden vehicle went off on a square.

Many of the victims were daily labourers waiting for jobs at an intersection in Sadr City, a sprawling majority Shiite neighbourhood in the northeast of the capital that has been repeatedly targeted.

Pictures posted on social media shortly after the explosion showed a huge plume of black smoke billowing into the sky and seriously injured people being evacuated.

According to a police colonel, at least 32 people were killed and 61 wounded in the blast, the second major attack in Baghdad in three days.

At least 27 people were killed by twin explosions in a busy market area in central Baghdad on Saturday, in what was the deadliest such attack in the Iraqi capital in two months.

There was no immediate claim for Monday's suicide blast but the Islamic State jihadist group has claimed all such attacks recently, including the double bombing on New Year's Eve.

The caliphate IS proclaimed in 2014 is shrinking steadily and jihadist fighters are defending Mosul, their last major urban stronghold in Iraq.

Observers have voiced fears that the group, once it definitively loses its status as a land-holding force, could increasingly revert to targeting civilians in Iraq's cities.