A car bomb exploded in the heart of Baghdad (search) Thursday, killing 17 people in a crowded commercial area, police said.

A police captain on the scene, speaking on condition of anonymity, said that the blast had narrowly missed a U.S. convoy that passed by seconds before.

The explosion gouged a giant crater near Nasser Square (search) on Saadoun Street, a densely populated commercial area with major hotels housing foreigners.

An Associated Press reporter on the scene saw five dead bodies in the rubble, including a decapitated corpse. Police said at least 17 people were killed.