A blast killed 12 people in Baghdad on Sunday, whilst Iraqi security forces arrested members of a suspected terrorist cell on the eve of parliament's first session since March's disputed election, dpa reported.
Thirty people were also injured in the bomb blast in central Baghdad, security sources told the German Press Agency dpa.
The explosion occurred between the central bank building and the Arab souk as bank employees were leaving the building at the end of official working hours, central bank official Fadel Jassem Hamadi.
The blast also hit a power generator and columns of smoke could be seen rising from it, Iraqi television reported.
Meanwhile, members of a suspected cell belonging to the Islamic Ansar al-Sunna militant group were arrested when Iraqi army forces raided their meeting in Baghdad.
"The arrest was made at a house in the Karrada district. They had in their possession documents, cameras, a sniper rifle, laptops and 25 thousand US dollars," army spokesperson Major General Qasim Atta said.
Several prominent leaders of the group were among those arrested, Atta said.
Separately, police arrested the assistant to former Iraqi vice president Izzat Ibrahim al-Durri, on suspicion of involvement in insurgency and terrorism.
Rapid reaction forces of the Ministry of the Interior arrested Ahmed Shehab al-Durri, Izzat al-Durri's assistant, in a security operation in Baldat al-Dor, north of Baghdad, Iraqi state television reported.
Ahmed al-Durri leads the Iraqi Naqshbandi movement, a Sunni insurgency group which announced militant operations after the execution of Saddam Hussein in 2006.
Izzat Al-Durri, who was vice president under Saddam Hussein's regime, has been in hiding since the US invasion of Iraq in 2003.
Police also arrested 16 wanted men Sunday in Baquba city, as all exits from the city leading to the capital Baghdad were closed.
Ghalib Attiya of Diyala police said that the swoop was part of a military operation in Baquba, which lies 57 kilometres north-east of Baghdad.
The operation was launched to secure the country ahead of Monday's first session of parliament following the March 7 elections.
Security plans in Baghdad had begun on Saturday, but security forces announced that there will not be a curfew.
The Iraqi parliament convenes after three months of political tension and deadlock following the elections in which former prime minister Iyad Allawi's Secular-Sunni Iraqiya List beat the rival State of Law coalition of incumbent premier Nuri al-Maliki by just two seats.
Allawi's list won 91 seats in the 325-member parliament, compared to 89 for al-Maliki's alliance.
The parliament will elect a president for the country, who will then invite the head of the largest bloc to form the new government.