A huge car bomb went off Wednesday at a checkpoint near the British Embassy and former coalition headquarters in Baghdad (search), killing at least 10 and hurting about 40, Iraqi authorities said.

One of those wounded was a U.S. soldier.

It was the deadliest attack in the capital since the U.S.-led coalition handed sovereignty over to the interim Iraqi government on June 28.

Also Wednesday, insurgents killed the governor of the Nineveh province (search), where the city of Mosul is located, in an attack on his convoy of vehicles as he drove toward Baghdad, an Iraqi Interior Ministry official said on condition of anonymity.

Attackers threw hand grenades and fired machine guns at the convoy of Gov. Osama Youssef Kashmoula about 60 miles south of Mosul, between the cities of Beji and Tikrit, the U.S. military said in a statement.

Kashmoula was wounded in the attack and taken to a hospital where he died, the military said. Two of his guards were also killed.

And authorities reported Wednesday that gunmen killed an auditor for the Industry Ministry in a drive-by shooting as he was leaving his office in Baghdad.

The attack on Sabir Karim occurred Tuesday, said Seif Abdel Rahman, a ministry official. Karim is the second auditor in Iraq's fledgling interim government to be targeted for assassination.

In other developments, the Philippine government announced it had begun withdrawing its roughly 50 peacekeepers from Iraq, apparently trying to placate the militants who kidnapped and threatened to kill a Filipino truck driver if all Filipino soldiers were not gone by July 20.

Underscoring the urgency of the Philippines' predicament, militants in Iraq said they had killed a captive Bulgarian truck driver and threatened to put another Bulgarian hostage to death in 24 hours, Al-Jazeera television reported Wednesday.

The explosion shook buildings throughout central Baghdad at about 9:15 a.m., when a homicide bomber detonated a car packed with 1,000 pounds of explosives. The bomb killed four Iraqi national guardsmen and seven Iraqi civilians, the U.S. military said. Many of the civilians were waiting in line to apply for jobs, presumably with the new Iraqi government or multinational forces.

"We were thrown on the ground. Then I saw many dead people on the ground," witness Alla Hassan said.

The U.S. military said 11 people were killed in the blast. The Iraqi Health Ministry said 10 were killed.

Black and gray smoke billowed from the blast site, leaving a crater two yards wide and a yard deep in the road. The charred remains of five cars stood by a protective blast wall that had been partially destroyed. Two other trucks and a car lay smoldering nearby. Police cars and ambulances raced to the scene, and U.S. helicopters hovered overhead.

The attack targeted a checkpoint leading to a parking lot in the area formerly known as the "Green Zone," the heavily protected Baghdad neighborhood housing government offices and the U.S. and British embassies, Iraqi police Col. Tawfeeq Sayer said.

"This is a naked aggression against the Iraqi people. We will bring these criminals to justice," interim Prime Minister Iyad Allawi (search) said during a visit to the scene.

Allawi said the attack was retaliation for the government's arrest of suspected terrorists, though he offered no details on suspects. The government said Tuesday it had arrested more than 500 suspected criminals in a police sweep of militants in Baghdad.

The blast occurred on a national holiday marking the 46th anniversary of the bloody nationalist coup that killed Iraq's last king, Faisal II.

One American soldier was slightly wounded, said Col. Mike Murray of the 1st Cavalry Division.

A Reuters driver suffered a shrapnel wound in the leg, agency spokeswoman Susan Allsopp said from London. The driver's condition was not considered serious.

The attack followed a period of relative quiet in Baghdad, but insurgents in other parts of Iraq remained active, continuing to attack U.S. and Iraqi forces and take hostages.

Kidnappers holding the Filipino, Angelo dela Cruz (search), said they would treat him like a prisoner of war if Manila made a good-faith move toward withdrawing its 51 troops early and would free him if the pullout was completed by July 20. The government statement Wednesday did not clarify when the pullout would be finished but appeared directed toward that demand.

"The Foreign Affairs Ministry is coordinating the pullout of the humanitarian contingent with the Ministry of National Defense," the statement said. "As of today, our head count is down from 51 to 43."

The government was already set to withdraw its troops Aug. 20. A full withdrawal before then would be a major blow to the unity of U.S.-led coalition in Iraq.

The statement was vague, following a pattern of unclear statements as the Philippines has tried to both save dela Cruz and avoid the impression that it's giving in.

Dela Cruz's family celebrated the announcement, and a Philippine official in Baghdad said there was no longer any risk of him being executed.

Roy Cimatu, Manila's special envoy for the Middle East, said Wednesday that the hostage was reported "alive and well" by Philippine officials negotiating for his release.

There was no immediate U.S. response to the latest announcement, but U.S. officials had earlier expressed displeasure that Manila was even considering caving in to the kidnappers' demand, a position echoed by Australia and Iraq's new interim government.

A deadline set by the Iraqi Islamic Army-Khaled bin Al-Waleed Corps for the Philippines to meet its troop withdrawal demand expired earlier this week, but negotiations continued in Iraq through intermediaries, the Philippines said.

Another group linked to Jordanian militant Abu Musab al-Zarqawi (search) said in a video broadcast Wednesday on Al-Jazeera that it had carried out its threat to kill a Bulgarian truck driver it was holding.

The Tawhid and Jihad group said it would kill a second Bulgarian it was holding within 24 hours if the United States did not release all Iraqi detainees.

Three men with their faces covered by black masks stood over a kneeling hostage, identified by reporters as Georgi Lazov, 30. The video contained the killing but it was not broadcast because it was too graphic, said Al-Jazeera spokesman Jihad Ballout. Al-Jazeera later reported the man's throat was slit.

The militant group earlier claimed responsibility for beheading American businessman Nicholas Berg and South Korean translator Kim Sun-il. It is also blamed for attacks that killed 100 people ahead of the transfer of power to Iraqis last month.

Bulgaria identified the other hostage as Ivaylo Kepov. The two were kidnapped while traveling to Mosul in northern Iraq. They were last heard from June 29.

Bulgaria, which has a 480-member infantry battalion in Iraq, had sent diplomats to Iraq to try to negotiate the men's freedom.

Also, an insurgent group holding an Egyptian driver demanded Wednesday that the Saudi company he works for pull out of Iraq within 72 hours, Al-Jazeera reported. The group did not issue a specific threat.

The Associated Press contributed to this report.