Two car bombs tore through a crowded commercial district in Baghdad's main Shiite district on Wednesday, killing at least 41 people, Iraqi police said.

The blasts went off in quick succession less than a week after bombings claimed more than 150 lives over a two-day span. The attacks have raised fears that suspected Sunni insurgents are regrouping and trying to reignite sectarian strife as the U.S. military begins to withdraw.

Sadr City is a former Shiite militia stronghold heavily guarded by Iraqi military. An offensive last year broke the control of militias over the district, and the area has been relatively quiet in recent months.

Angry young men gathered around the bloodstained pavement and twisted heaps of metal from the cars, which had been parked near a restaurant and an ice cream stand.

Saadi Rashid, 35, said he had just bought some new clothes for his children at a nearby store when the blast went off, sending shrapnel piercing through his shoulder and his leg.

"I saw my blood covering the clothes that I had planned to take to my kids," he said from his hospital bed. "What a disaster when I felt that I couldn't bear to walk or even to stand."

The increase in high-profile attacks in recent weeks has raised questions about the ability of Iraq's forces to sustain security gains as they increasingly take over from the Americans.

The blasts also followed the announcement by the Iraqi government that it has captured the alleged leader of an Al Qaeda front group. On Tuesday, the Iraqi military presented the first image of the man it says is Abu Omar al-Baghdadi, saying his arrest would deal a major blow to the insurgency.

Iraqi military spokesman Maj. Gen. Qassim al-Mussawi said three other explosives-laden cars had been found but defused near the site along with three more in Shiite areas elsewhere in the city.

He blamed the attacks on followers of al-Baghdadi, saying "absolutely it is a message of reprisal by these terrorist gangs."

The U.S. military, however, said Al Qaeda was behind the recent high-profile attacks targeting Shiites, saying it was a bid to provoke the kind of sectarian violence that nearly tore the country apart in 2006 and 2007.

"They are very emotionally charged targets. They are meant to go after a vulnerable aspect of society, to just literally kill as many innocent civilians as they randomly can," Maj. Gen. David Perkins told The Associated Press Wednesday. "From Al Qaeda's point of view, they are trying to generate a retribution attack and start ethno-sectarian violence up again."

However, Perkins insisted the insurgents remained unable to carry out such attacks on a daily basis.

"We have seen a couple of recent high-profile attacks, which obviously are a concern. But we don't think that's a fundamental shift," he said.

Sadr City, a sprawling Shiite slum in eastern Baghdad that contains about 2.5 million people, has been the site of several attacks by suspected Sunni insurgents as well as clashes between Shiite militiamen and U.S. forces.

There were conflicting death tolls Wednesday, as is usual in the chaotic aftermath of bombings.

Police and hospital officials said 41 people died and more than 60 people also were wounded. An Interior Ministry official gave a slightly higher figure, saying 45 people had died.

The officials all spoke on condition of anonymity because they weren't allowed to release the information.

Nobody claimed responsibility for the attack, but car bombs and suicide attacks bear the hallmark of Al Qaeda in Iraq and other insurgent groups.

On Nov. 23, 2006, mortar rounds and five car bombs killed 215 people in Sadr City in one of the deadliest attacks of the war.

Elsewhere in Baghdad, a roadside bomb struck a minibus in a Sunni area in southern Baghdad, killing at least five people and wounding three others, according to police and hospital officials.

Tensions also rose Wednesday near the northern disputed city of Kirkuk when U.S. troops opened fire after being ambushed while distributing grants to Iraqi businesses.

Iraqi officials said two civilians were killed when the Americans returned fire, but the U.S. military said those killed were enemy fighters.

The shooting came as the Iraqi government has expressed anger over a deadly U.S. raid in southern Iraq that it says violated a security agreement.

U.S. spokesman Maj. Derrick Cheng said several people launched a grenade and began shooting Wednesday as the patrol was handing out U.S. military funds as micro-grants to stimulate small businesses in the town of Riyadh.

He said reports indicate "two enemy killed and one wounded." He says one American was also wounded.