Residents in Baghdad's Hayy al-Shurta neighborhood were on Friday morning assessing the damage caused to their properties by a car bomb blast which occurred on late Thursday.
A car packed with explosives blew up there, killing at least 51 people and wounding 55, security and medical sources said, in the deadliest such attack in Iraq this year.
Security sources said the vehicle which blew up was parked in a crowded street full of garages and used car dealers, in Hayy al-Shurta, a Shiite district in the southwest of the city.
The death toll could climb further as many of the wounded are in critical condition, a doctor said.
Islamic State, which is on the defensive after losing control of eastern Mosul to a US-backed Iraqi military offensive, claimed responsibility for the bombing in an online statement.
As it cedes territory captured in a 2014 offensive across northern and western Iraq, the ultra-hardline group has stepped up insurgent strikes on government areas, particularly in the capital Baghdad.
The bombing is the second to hit car markets this week, suggesting the group has found it easier to leave vehicles laden with explosives in places where hundreds of other vehicles are parked.
A suicide bomber detonated a pick-up truck on Wednesday in Sadr City, a poor Shiite suburb in the east of the capital, killing at least 15 people. That explosion took place in a street full of used car dealers.