A suicide car bombing claimed by the Islamic State group killed at least 75 people in a Baghdad shopping district in the early hours of Sunday, officials said, the deadliest single attack in the capital this year.

The blast, which ripped through a street in the Karrada area where many people go to shop ahead of the holiday marking the end of the Muslim fasting month of Ramadan, also wounded more than 130 people, security and medical officials said.

IS issued a statement claiming the suicide car bombing, saying it was carried out by an Iraqi as part of the group's "ongoing security operations".

The jihadist group said the bombing targeted members of Iraq's Shiite Muslim majority, whom it considers heretics and frequently attacks in Baghdad and elsewhere.

The bombing came a week after Iraqi forces completely recaptured Fallujah, a city 50 kilometres (30 miles) west of Baghdad that was a key IS stronghold.

Violence in the capital has decreased since IS overran large areas north and west of Baghdad in 2014, but the jihadists have previously stepped up attacks following military losses.

With Fallujah retaken by Baghdad, second city Mosul is the only major Iraqi population centre held by IS.

Two 'senior' IS military leaders killed in Iraq strike: Pentagon
Washington (AFP) July 1, 2016 - A coalition air strike near the Islamic State bastion of Mosul in Iraq has killed two of the jihadist group's senior military leaders, the Pentagon said Friday.

"Coalition forces conducted an air strike against two ISIL senior military commanders on June 25 near Mosul, Iraq, resulting in their deaths," Pentagon press secretary Peter Cook said in a statement, using an acronym for the IS group.

"The precision strike killed Basim Muhammad Ahmad Sultan al-Bajari, ISIL's deputy minister of war, and Hatim Talib al-Hamduni, an ISIL military commander in Mosul."

Cook said al-Bajari was a former Al-Qaeda member who joined the IS group and oversaw the June 2014 offensive to capture Mosul.

He "also led the ISIL Jaysh al-Dabiq battalion known for using vehicle-borne IEDs (homemade bombs), suicide bombers and mustard gas in its attacks."

Al-Hamduni was a military commander in Mosul and the head of military police in the region, Cook said.

Mosul is Iraq's second-largest city and became the IS group's de facto Iraq capital.

Iraqi security forces have in recent weeks made significant progress against the IS group, including the recapture of the city of Fallujah this month.

Attention is now shifting to Mosul, where a battle to liberate the city is expected to unfold in the coming months.

"Removing these terrorist leaders from the battlefield shapes the environment for Iraqi forces to ultimately liberate Mosul with support from the international coalition," Cook said.