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US President George W. Bush strongly condemned the attack in the Iraqi parliament cafeteria Thursday, saying: "My message to the Iraqi government is `We stand with you.'"
Eight people died in the attack, including two Iraqi MPs.
Iraqi state television said at least 30 people were wounded.
A spokesman for the US Embassy in Baghdad - also in the Green Zone - said no Americans were injured in the blast.
The attack was caught live on TV, when smoke suddenly appeared behind a Muslim imam being interviewed on Alhurra television. The imam ducked for cover, and people were seen behind him screaming and running for cover.
Britain joined the US's condemnation of the attack. British Foreign Secretary Margaret Beckett said she was "deeply shocked and saddened" to hear of it.
The Green Zone is a highly secured neighborhood of Baghdad, guarded by Iraqi coalition forces and by US troops as well. All persons entering the zone undergo security checks.
The area includes the evacuated palace of former Iraqi leader Saddam Hussein.
However, apart from Iraqi government buildings, the Green Zone contains many Iraqi civilians who simply live there; after the ousting of Saddam, many squatters entered the zone and until Thursday brutal attack, enjoyed the relative calm of the Zone.
Only hours prior to the attack on the cafeteria, a truck loaded with dynamite exploded when it was on a bridge on Tigris, a river crossing Baghdad. Part of the bridge collapsed in the blast.
AP contributed to this report.