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BAQOUBA, Iraq -- A suicide car bomb exploded on a busy downtown boulevard in Baqouba on Wednesday, reducing a bus full of passengers to a charred wreck, ripping through nearby shops and killing at least 68 Iraqis in one of the deadliest single insurgent attacks since the U.S. invasion.

Dozens of burned bodies were strewn in the street and piled on curbsides, and vehicles, fruit stalls and shops were a bloody tangle of twisted metal from the blast, which targeted Iraqis lined up outside a police recruiting station. Most, if not all, of the dead were civilians.

''These were all innocent Iraqis, there were no Americans,'' an angry man shouted as Iraqis tried to cover the dead with pieces of cardboard.

The attack, the deadliest since Americans handed power to an Iraqi government June 28, came three days ahead of a national conference aimed at creating an interim assembly-- widely considered a vital step toward democracy. Iraqi officials have warned attacks could intensify as the country tries to move forward.

Elsewhere, U.S. and other coalition forces were caught in fierce gunbattles with militants in two cities.

A raid by Iraqi forces backed by U.S. and Ukrainian troops sparked fighting in Suwariyah, southeast of Baghdad; 35 guerrillas and seven Iraqi policemen were killed. Ten Iraqi police were wounded and 40 insurgents were captured, said Polish Lt. Col. Artur Domanski, a multinational force spokesman.

In Ramadi, west of the capital, insurgents launched near simultaneous attacks on several U.S. bases, wounding 10 soldiers. A guerrilla was killed, and during the fighting a mortar hit an apartment building, killing an Iraqi woman. Later, gunmen in the city fired on two U.S. aircraft, damaging both and wounding a pilot, a military spokesman said without specifying the type of craft.

The blast in Baqouba, an insurgent hotbed 35 miles northeast of Baghdad, was the latest to cause heavy civilian casualties. Such deaths have angered many Iraqis even as guerrillas insist their fight is against U.S. troops and the new American-backed government. U.S. forces have been trying to lower their profile and put Iraqi security forces in the front lines.

''(The bombing) was once again an attempt by murderers to deny the Iraqi people their dream of a peaceful country that rests on a solid foundation of freedom,'' Secretary of State Colin Powell said during a news conference in Cairo. ''We have to condemn it, we have to fight it. We must not let these kinds of tragic incidents deter us from our goal.''

Iraqi officials have expressed concerns that Saturday's national conference will be a major target for attack. During the conference, some 1,000 delegates are to put together an assembly that will work alongside Prime Minister Iyad Allawi's government.

''The terrorists' goal is to hamper the police work, terrorize our citizens and show that the government is unable to protect the Iraqi people, and this will not happen,'' said Hamid al-Bayati, a deputy foreign minister.

The 10:13 a.m. bombing shattered the bustling heart of a commercial district filled with shops, government buildings and the police station.

Twenty-one of the dead were passengers on a white commuter bus that was left a charred husk by the blast. Pieces of glass, twisted metal and abandoned shoes, all covered in blood and human remains, were strewn across the pavement, and a shop's white security gate was splattered with blood.

Witnesses said the bomb targeted men waiting outside the al-Najda police station trying to sign up for the force.