A truck bomb exploded during rush hour Sunday on a busy commercial street in northern Baghdad, killing at least 12 people and wounding about two dozen, Iraqi police and health officials said.

The attack came as Iraqi lawmakers held intense, last-minute negotiations ahead of a special parliamentary session aimed at defusing a crisis over Kurdish demands to incorporate the disputed city of Kirkuk and surrounding areas into their autonomous region.

The debate over Kirkuk and its vast oil wealth has blocked passage of legislation providing for provincial elections this year, a major U.S. goal aimed at reconciling Iraq's rival ethnic and religious communities.

The United Nations has recommended postponing provincial elections in Tamim province, where Kirkuk is the capital, as a way of ensuring the balloting elsewhere in the country.

A senior parliamentary official said lawmakers were leaning toward approving the U.N. proposal, and would wait for a committee to submit its recommendations at the end of the year. He spoke on condition of anonymity because of the sensitivity of the information.

Sunni Arabs and Turkomen in Kirkuk are seeking international protection, the official said.

Underscoring the importance of the Kirkuk issue, U.S. President George W. Bush telephoned the Sunni parliamentary speaker Mahmoud al-Mashhadani and Shiite Vice President Adel Abdul-Mahdi to urge a resolution, according to statements Sunday from their offices.

The U.S. Embassy called the elections law "an important foundation for the political process for many years to come."

"Our hope is that a compromise can be reached soon and that the law can be passed soon so that the Iraqi people can move forward in preparation for the elections," Embassy spokeswoman Mirembe Nantongo said Sunday.

As lawmakers engaged in heated debate, health officials tended to the wounded after an explosives-packed small truck blew up some 200 yards (meters) away from a passport office in one of Baghdad's Sunni Arab districts.

Police and health officials said 12 people were killed, including two women, and at least 23 others were wounded. They spoke on condition of anonymity because they were not authorized to talk to media.

It was the first major bombing in Baghdad since last Monday, when three suicide bombers killed more than 30 people and wounded hundreds during a Shiite religious procession.

Residents of Kirkuk fear that if lawmakers fail to reach agreement, tension could rise in the city, where a suicide bomb attack killed 25 people last week during a Kurdish protest.

"I hope they can reach a solution that fits all parties and prevents the situation from deteriorating further," said Yelman Ayad, a 59-year-old Turkoman who sells spare car parts in Kirkuk.

"The mistakes of politicians brought us to this stage. Our social fabric was torn up in Kirkuk, and this is very dangerous for all of Iraq," Ayad said.

Serwan Ahmed, a 35-year old Kurd, also called on the lawmakers to reach consensus. "They have to settle all their differences, otherwise it will lead to a crisis in all Iraqi cities," he said.

Last month, Iraq's parliament approved legislation to hold elections for local councils in all 18 provinces.

The measure said seats on the Tamim provincial council should be divided equally among Kurds, Turkomen and Arabs. It would also transfer security responsibilities in Kirkuk to mostly Arab military units brought from central and southern Iraq instead of those already there — an apparent move against Kurdish troops heavily deployed in the area.

But Kurds and their allies, who currently hold a majority on the council, oppose the power-sharing formula. Iraq's three-member presidential council rejected the measure and sent it back to parliament after President Jalal Talabani — a Kurd — opposed it.

Saleh al-Jabouri, a 26-year-old Sunni Arab who owns a supermarket in Kirkuk, criticized that step.

"It was a democratic process, why did they reject it?" he asked. "We (Arabs) are against any new resolution that could affect our presence in this city."

Parliament adjourned for a one-month summer recess last week but agreed to hold a special session Sunday to try to resolve the standoff and approve a new election bill. Electoral officials have said failure to pass the bill could delay the nationwide vote until next year.

Meanwhile, a roadside bomb killed six people, including three Iraqi soldiers, and wounded 13 others Sunday south of Baghdad, police said.

In Tarmiyah, north of Baghdad, a clash between U.S.-allied fighters and civilians killed one civilian Sunday and wounded 10 others, local police said.

The U.S. military said Sunday that a suspected Shiite militiaman believed to have recently returned from Iran was detained along with another suspect in the southern city of Qurna.

The military has claimed success against Shiite militias it says are trained and funded by Iran despite denials from Tehran. But skeptics fear the fighters will regroup and try to reassert power.

The U.S. military also said one American soldier died and another was injured in a vehicle accident southwest of Baghdad a day earlier.