Five people were killed and at least 35 more were injured Wednesday in a large car bomb explosion that ripped through a restaurant ringing in the new year in central Baghdad.

Witnesses said at least 30 people may have been inside Nabil Restaurant, which was hosting a New Year's Eve party Wednesday night in an upscale section of the Iraqi capital.

Five Iraqis were killed. The wounded included 32 Iraqis, one American and two Britons, police and hospital officials said.

It was not clear who was behind the explosion, which came despite tightened security in the capital over the holiday.

A British Foreign Office spokeswoman said staff in the Iraqi capital were checking the situation, but could not immediately confirm the report.

The Los Angeles Times said three of its journalists and four local support staff members suffered apparently minor injuries.

The wounded journalists were identified as Chris Kraul, a correspondent who most recently headed the Times' Mexico bureau, Rome bureau chief and Polk award-winner Tracy Wilkinson and correspondent Ann Simmons, the Times' former bureau chief in Nairobi, Kenya.

Simmons is British and the two other Times reporters are U.S. citizens.

The Times said it was checking into the status of their wounded staffers but believed they came away with only cuts and bruises.

"All are being treated for injuries that do not appear to be life-threatening," said Times spokesman David Garcia.

Hours after the restaurant bomb, celebratory gunfire erupted across Baghdad as Iraqis marked the arrival of 2004 by firing guns into the air. Tracer bullets flashed skyward.

Following the explosion, the restaurant was ablaze in the high-end neighborhood of bars and eateries known as Arasat Al-Hindiya (search), in Karrada quarter. The area caters to the city's wealthy and to tourists.

A source with the U.S. military's 1st Infantry Division (search) told Fox News that military explosive experts believe there were about 400 pounds of explosives and possibly some artillery shells packed in the car, which was a dark green sedan.

The blast radius was about 300 meters, and there was damage to the restaurant and the Akea Hotel across the street.

Sirens wailed and helicopters buzzed overhead as ambulances and U.S. soldiers converged on the restaurant, a popular spot with foreigners and journalists that advertised a New Year's Eve party with live music and belly dancing.

Witnesses said rescuers were pulling people out of the Nabil Restaurant wreckage. The Baghdad police chief, Lt. General Ahmed Kadhem, said five people died.

Police Brig. Hamid Alyasiry, who is in charge of the Karrada quarter, confirmed that it was a car bomb.

"The people who are carrying out such attacks do not discriminate about the place," Alyasiry said. "They want to frighten everyone to create terror."

An American soldier leaned into the rubble after discovering an injured victim. "She's got a pulse, she's got a pulse," he screamed.

One witness, Ahmed Hassanain, said a white Toyota Corolla car drove by the area five or six times before the bombing. The last time it passed, he said, the guard at the restaurant shot at it. The car drove away, and two minutes later the bomb went off. Hassanain said he didn't know if it was the Corolla that blew up.

"These people are terrorists," Hassanain said. "Nobody here supports them."

Blood streaming down his face, a man named Khalil said: "I don't know what it was, whether it was a rocket or a bomb. Why did they have to do it to us?"

Nabil Restaurant owner Nabil Hanna said 50 people had booked for the party, including about a dozen foreigners. Hanna was not at the restaurant at the time of the blast.

Outside the restaurant, a young man and a woman with blood on her face and shoulders wept and hugged each other. She said they were a family of six having New Year's dinner in the building next door when the blast ripped away the side wall. Her uncle was taken to a hospital, she said.

Inside Nabil, big round tables set for dinner were covered with food. A bottle of White Horse scotch was still standing but with the neck blown off.

Mothafar Mounir, the restaurant manager, said he heard a big blast and then the ceiling caved in on a table where an Iraqi family was seated. He said a restaurant guard and two staff were among the injured.

The Nabil restaurant serves fine wine and other expensive alcoholic drinks — a rarity in Baghdad — and a menu of Western and Arabic dishes. The tables had red and white tablecloths, and it was dimly lit. Musicians played live Arabic music on an electronic keyboard and other instruments.

Several cars outside the restaurant were wrecked and in flames, and Iraqis with hoses tried to put out the blaze. A large crater was visible on a side street next to the restaurant as ambulances converged on the scene, near the former U.S. Embassy.

"There was an explosion. The glass came flying. Everything else blew up. People were blown apart," said Basam Sarhan, a 25-year-old baker who was working in the kitchen at the back of the restaurant, near where the bomb hit.

The area of the blast is frequented by rich Iraqis who shop and visit restaurants, and is lined with chic shops selling items such as cosmetics, curtains and upholstery. There are many pharmacies and two-story houses. Three blocks from the restaurant, the windows of a big clothing shop were shattered.

There were two other explosions earlier Wednesday near U.S. military convoys in the capital — one a car bomb, the other a bomb hidden in bushes outside another restaurant.

"It was a car bomb. It went off in front of us. It was very powerful," a young boy told Associated Press Television News.

Several improvised explosive devices have gone off in the Karrada area in recent days.

U.S. soldiers and Iraqi police had stepped up security in Baghdad on Wednesday, erecting more razor wire and checkpoints in key areas. Military officials had expected the possibility of attacks by enemy fighters over the holiday period.

The blast took place on the opposite side of the Tigris River from what's known as the "Green Zone" — a barricaded area that houses the Coalition Provisional Authority (search), the headquarters of the U.S.-led coalition governing Iraq.

A British representative to the CPA told Fox News it was most unlikely that any British citizens injured in the restaurant blast would have been CPA employees.

"CPA personnel was told not to leave the Green Zone after noon local time on Wednesday," he told Fox News.

A U.S. military told Fox News that a U.S. military quick-reaction force had been dispatched to the area.

Businesses themselves have not specifically been targeted by guerrillas in Iraq since the fall of Saddam Hussein's regime.

Gunfire Amid Protests in Kirkuk

Earlier, gunfire erupted Wednesday as hundreds of Iraqis marched in protest over fears of Kurdish domination in the oil-rich northern city of Kirkuk. Police said two people were killed.

In Baghdad, a car bomb exploded as a U.S. convoy passed on a street full of shops, destroying a Humvee, Iraqi police Sgt. Thabet Talib said. An 8-year-old Iraqi boy was killed and 21 other people were wounded, including five U.S. soldiers and five Iraqi civil defense personnel.

Later, a bomb hidden in shrubs outside a restaurant in Baghdad went off as a U.S. military convoy passed, wounding three American soldiers and three Iraqi civilians.

Near the southern city of Basra, a South Korean was killed in an ambush and resulting gunbattle between Romanian soldiers and Iraqi insurgents, reports said.

South Korea has pushed forward with a plan to send dispatch 3,000 troops to Iraq, in addition to 465 medics and military engineers already there.

Also Wednesday, U.S. military officials reported a U.S. soldier was killed and a second wounded in the accidental discharge of a weapon Tuesday night in the town of Tanf on the Syrian border.

In Kirkuk, it was not immediately clear who fired the shots into hundreds of Arab and Turkmen protesters demanding that the city remain under a central Iraqi government and not be incorporated into any proposed Kurdish area.

"Kirkuk is an Iraqi city!" protesters shouted.

Police Col. Salem Taha said Kurdish gunmen opened fire as demonstrators opposed to Kirkuk joining a Kurdish federation tried to converge on the office of the Patriotic Union of Kurdistan party.

But a party official, Jalal Jawher, said armed men who had infiltrated the protest fired at his party office and police guarding the building returned fire.

"We did not open fire on the protesters. Not a single shot was fired from our building," Jawher said.

Two protesters were killed and 16 were wounded in the shooting, said Taha, the police colonel. Records at Jumhouri Hospital showed 26 wounded were admitted.

Some Kurds in Kirkuk have been calling for the city to become part of an autonomous Kurdistan, joining a Switzerland-sized area of northern Iraq where Kurds have ruled themselves since the end of the 1991 Gulf War under U.S.-led aerial protection.

The Governing Council, selected by U.S. administrator L. Paul Bremer to reflect the size of the country's diverse groups, has 13 Shiites, five Arab Sunnis, five Kurdish Sunnis, one Turkmen and one Christian.

The U.S.-led coalition plans to transfer authority to a transitional Iraqi government by July 1.

Fox News' Greg Palkot, David Piper and The Associated Press contributed to this report.