The vehicle, bearing the name of a construction company, exploded about 150 metres from the police station here, 50kms from Baghdad, where American soldiers regularly come under attack.
At least six charred and mutilated bodies lay on the ground, and human fragments and blood stains were seen in the courtyard of a neighbouring school.
“We are still trying to find out how many people were killed because the explosion was big and the bodies are severely mutilated and charred,” said policeman Ghassan Adnan, as he struggled to keep onlookers away.
The blast came a day after suicide car bombings in Baghdad devastated the offices of the International Committee of the Red Cross (ICRC) and four police stations, killing 43 and wounding more than 200.
As firefighters and ambulances raced to the scene, a number of people used their own cars to take at least eight people, including two women, to the Fallujah General Hospital, where entire families were wailing and shouting angrily.
Mosques across the city appealed through loudspeakers for blood donations.
US helicopters hovered overhead and five military vehicles took position in the area of the blast. Four vehicles, in addition to the one used in the bombing, were completely destroyed and three others damaged.
Two men at the scene said they saw the explosives-laden vehicle parked outside the offices of the power company. They said no one was in the vehicle at the time, suggesting the charge was detonated by remote control.
“The pickup was parked at a busy taxi lot, but no driver was inside,” said Bilal Fawzi, 29, who owns a nearby grocery store.
Hamid Ali, 48, an employee at the power company, said the “explosive charge seems to have been blown up from a distance”.
A policeman said “the police station is close, but the car had been parked quite a way from it. It was parked in a place where people gather to take taxis”.
Several people at the scene expressed outrage over the killings on a busy street.
“This act is not directed against Americans; it killed innocent people,” said Mr Fawzi.
In a city accustomed to daily bombings, a number of boys at the scene were seen using sticks to pick up charred human remains from the middle of the road.
Fallujah and neighbouring areas have been rocked by attacks targeting US troops and Iraqi police in recent months.
Street walls in Fallujah bear graffiti reading: “Long Live Saddam,” and “Down with (US President George) Bush.”
“How can any anyone carry out such massacres during Ramazan. These are infidels trying to stir trouble between Sunnis and Shias in Iraq. This is not an operation by the resistance,” said teacher Omar Khalil.
US SOLDIER KILLED: A roadside bomb blast in the southern Iraqi city of Basra on Tuesday killed a soldier from the US-led occupying forces and two civilians, the British military said. “There were two explosions in Basra city on Tuesday. One explosion killed an Iraqi civilian, a non-Iraqi civilian and a coalition soldier,” a British military spokeswoman said. She said there were no casualties in the second blast.
British soldiers are in command of security in Basra, leading a multinational force.
US POST HIT: A US military post in the northern city of Kirkuk was hit by five Katuysha rockets on Tuesday, Iraqi police said, without saying if there were any casualties.
Meanwhile, a missile exploded in a garden near a Baghdad hotel on Tuesday night, and four people were later arrested after mortar rounds were found in their car, according to police.
“We found an exploded projectile,” police officer Fadel Mehdi said, adding that it was found in a garden near the Babel Hotel. An officer said four men were detained after mortar rounds and weapons were found in their car.—Agencies