A suicide car bomber detonated his explosives-packed Mercedes near a row of stores in the Shiite militia stronghold of Sadr City on Saturday, killing at least 15 people, police and hospital officials said.

The attack in the eastern Baghdad enclave came as at least 36 other people were killed or found dead in Iraq, including four who died in a bombing of an outdoor market in the Shiite holy city of Kufa.

Violence has been unrelenting in Iraq and the suicide bombing in Baghdad was among a series of attacks tempering U.S. claims of success in taming the capital just days before a pivotal progress report is due to be delivered to Congress by the top commander in Iraq, Gen. David Petraeus, and U.S. Ambassador Ryan Crocker.

Petraeus acknowledged the difficulties in a letter to U.S. forces on Friday summarizing the results of the troop increase President Bush ordered last winter.

"It has not worked out as we had hoped," he wrote, offering a preview of what he planned to tell Congress in hearings that begin Monday amid a fierce debate over whether Bush should begin withdrawing troops from Iraq.

The British military, meanwhile, said 500 troops would be withdrawn from Iraq in coming months as part of its planned reduction in forces as Iraqis assume control of their own security in southern Iraq. The withdrawals will reduce the British force in Iraq to 5,000, based around Basra, Iraq's second-largest city, 340 miles southeast of Baghdad.

Basra, a predominantly Shiite city, has been largely calm since the British soldiers pulled back from the city center to the airport last Sunday, ceding responsibility to Iraqi security forces.

U.S. commanders have warned that Sunni insurgents would step up attacks ahead of the Petraeus-Crocker report to try to influence the debate. They also appeared to be determined to try to provoke Shiite militia violence, though radical Shiite cleric Muqtada al-Sadr ordered his fighters to stand down for up to six months.

The attacker in Sadr City was believed to be aiming for a busy market but was forced to detonate his explosives early after Iraqi police fired at his car, devastating a barber shop and other nearby stores.

Two barbers and six clients were among the 12 people killed, a police official said, speaking on condition of anonymity because he was not authorized to release the information.

AP Television News footage showed the charred wreckage of several cars that were destroyed in the blast, with pools of blood left on the pavement. A man with a cast on his leg lay on a hospital bed in an overwhelmed emergency room as people fanned patients with pieces of paper to offer relief from the searing summer heat.

The overall number of civilians killed in Iraq has declined since Bush ordered some 30,000 American troops to Baghdad and surrounding areas earlier this year, but suspected Sunni insurgents have staged several spectacular bombings.

A prominent Sunni politician warned the drop was a "temporary improvement" that would be reversed by Prime Minister Nouri al-Maliki's failure to achieve national reconciliation.

"We need a liberal government we need a secular government, without such a government the violence will continue," Saleh al-Mutlaq told Al-Jazeera in an interview from Amman, Jordan.

"The violence will grow again, as people will lose hope if nothing changes on the political side," he said.

Al-Mutlaq's Sunni party, the Iraqi National Dialogue Front, announced it was ending its parliamentary boycott so it can participate in the debate over stalled benchmark legislation demanded by Washington, including a draft law on sharing Iraq's oil riches. The party has only 11 of the 275 seats and its return has limited effect.

A law aimed at returning thousands of members of Saddam Hussein's ousted Baath Party to government appeared to be the closest to being ready.

"We will receive it today or tomorrow and then it will be put forward in parliament for discussion this week," deputy parliament speaker Khaled al-Attiyah told The Associated Press by telephone.

Elsewhere, the U.S. military announced the Army's first-ever use of a drone aircraft to kill enemy fighters in Iraq.

The Hunter unmanned aerial vehicle, or UAV, dropped a precision bomb on two suspected insurgents believed to be preparing to plant roadside bombs on Sept. 1, the military said. The drone was called in for the attack near Qarraya, 180 miles northwest of Baghdad, after a scout team from the 2nd Battalion, 25th Aviation Regiment, observed the insurgents at work.

In a major step to try end attacks on the country's oil industry, Iraq's Defense Ministry warned Iraqis to keep their distance from oil pipelines or power lines because military planes "will open fire immediately on anyone who tries to harm the nation's wealth or infrastructure."