A homicide car bomber turned a venerable book market into a deadly inferno and gunmen targeted Shiite pilgrims Monday as suspected Sunni insurgents brought major bloodshed back into the lap of their main Shiite rivals. At least 38 people died in the blast and seven pilgrims were killed.

The violence — after a relative three-day lull in Baghdad — was seen as another salvo in the Sunni extremist campaign to provoke a sectarian civil war that could tear apart the Shiite-led government and erase Washington's plans for Iraq.

The Shiite Mahdi Army militia has so far resisted full-scale retaliation through a combination of self-interest and intense government pressure. But the militia's leader, the radical cleric Muqtada al-Sadr, is now being cornered in new ways that have put him on the defensive.

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An expected Cabinet reshuffle could take a serious bite out of al-Sadr's voice in government — a move strongly encouraged by Washington.

Al-Sadr also opened the door for U.S. and Iraqi troops to enter the Mahdi stronghold of Sadr City in Baghdad — under a painstaking deal with authorities — but his loyalists are still being hunted outside the capital.

"Al-Sadr and his forces could be feeling under siege," said Alireza Nourizadeh, chief researcher at the London-based Center for Arab-Iranian Studies. "That makes them less predictable. That means they are more dangerous."

One possible sign of brewing troubles was 30 bullet-ridden bodies found across Baghdad. Many of those killings are blamed on Shiite death squads, and Monday's figure was the highest in weeks.

And the Sunni extremists keep pressing.

The suicide mission tore through booksellers and other stores on narrow Mutanabi Street, a mostly Shiite-run commercial area in Baghdad's historical heart along the Tigris River.

Within seconds, flames engulfed open-air stalls and shops brimming with books and magazines. Gas-powered generators — needed because of frequent power cuts — exploded one by one.

Bloodstained pages that escaped the fire were carried away in a wind-whipped pillar of black smoke.

Firefighters had to spray huge arches of water from blocks away because their trucks were took large for the warren of lanes in old Baghdad. At least 38 people died and 105 were injured, said Raad Jabar, a Health Ministry official.

But the final casualty count may not be clear until Tuesday. Fire crews still battled the blazes more than 12 hours after the attack, said civil defense Maj. Gen. Abdul Rasoul al-Zaidi.

"Papers from the book market were floating through the air like leaflets dropped from a plane," said Naeem al-Daraji, a Health Ministry worker who was driving about 200 yards from the blast and was slightly injured by broken glass from his car window.

"Pieces of flesh and the remains of books were scattered everywhere," he said.

A worker at a nearby shoe store, Youssef Haider, 24, said the blast flipped burning cars with charred bodies trapped inside. He and co-workers used two-wheel pushcarts for shoe boxes to carry away the wounded.

In other violence, gunmen opened fire on Shiite pilgrims in several places around Baghdad, killing at least seven people, police said.

The Shiites were apparently heading to shrines and holy sites in southern Iraq for the annual commemoration to end a 40-day mourning period for the death of a revered 7th century Shiite martyr, Imam Hussein.

It was the bloodiest day in the capital in more than a week, and came on the heels of a major push by nearly 1,200 U.S. and Iraqi troops into teeming Sadr City as part of a nearly 3-week-old security offensive across Baghdad.

The sweeps seek to drive out militants and establish permanent stations in troubled areas. Search teams also uncovered a nearly tenfold increase in hidden weapons stashes in the past week, the military said.

More than 21,000 small arms rounds were confiscated last week, up from 2,160 the previous week; 937 mortar rounds were discovered, up from 89 the week before, it said. Attacks on soldiers in some Shiite districts are also down sharply.

That's mostly because al-Sadr ordered his fighters to pull back after coming under strong government arm-twisting to allow the security plan to proceed.

In Sadr City, Iraqi troops set up checkpoints and took a far more visible role than Americans, who led the push into the area Sunday. The move was an apparent attempt to avoid Shiite anger in a place of past street battles with U.S. forces.

The troops plan to establish outposts in Sadr City that will bring together Iraqi police, military and U.S.-led forces, said U.S. Brig. Gen. Terry Wolff, who oversees training of Iraqi soldiers.

"It's about presence," he said.

But pressure on al-Sadr and his Mahdi Army continued on other fronts.

In the southern city of Karbala, the home of a Mahdi Army leader was raided in a joint U.S.-Iraqi operation, the U.S. military said.

Al-Sadr's followers also warned they would fight any Cabinet changes that would single them out.

"We will not give up our share and any of our ministerial posts under any circumstances unless all other blocs are subjected to the same procedure," said Saleh al-Ukaili, head of Sadrist faction in parliament, where the bloc controls 30 of the 275 seats.

An adviser to Prime Minister Nouri al-Maliki said 10 of the 39 ministry posts soon would be replaced — including five of the six ministers loyal to al-Sadr. The adviser spoke on condition of anonymity because they were not supposed to release the information.

Relations between al-Sadr and the government are already tense. Late last year, the prime minister withdrew his official protection for al-Sadr and the Mahdi Army and allowed U.S.-led forces to close in.

Complete coverage is available in FOXNews.com's Iraq Center.