In the deadliest single strike since the fall of Saddam Hussein (search), a suicide car bomber attacked mostly Shiite police and National Guard recruits lined up for physical exams at a medical clinic Monday, killing 120 and wounding more than 130 there and at a nearby market.

The bombing presented the boldest challenge yet to Iraq's efforts to build a security force that can take over from the Americans.

The explosion in Hillah (search), a largely Shiite Muslim town about 60 miles south of Baghdad, was so powerful that the only thing remaining of the bomber's car was the twisted wreckage of the engine block.

Dozens of people stepped through small lakes of blood that pooled on the street to retrieve shattered limbs, severed feet and hands.

Empty shoes and sandals of those killed or wounded were thrown into a corner. Scorch marks infused with blood covered the clinic's walls. Morgue workers unloaded plastic body bags from pickup trucks as weeping relatives looked on.

Some of the victims were shoppers or vendors from a nearby outdoor street market selling produce, sandwiches and other food. But most were recruits waiting outside the clinic.

"I was lucky because I was the last person in line when the explosion took place. Suddenly there was panic and many frightened people stepped on me. I lost consciousness and the next thing I was aware of was being in the hospital," said Muhsin Hadi, 29, a recruit. One of his legs was broken in the blast.

Angry crowds gathered outside the main hospital, chanting "Allah Akbar," Arabic for "God is great," demanding to know their relatives' fate. People at the site of the attack reportedly chanted slogans against the "Wahhabis," referring to adherents of the strict form of Islam preached by Osama bin Laden.

The bombing comes at a time when the Sunni Arab insurgency is trying to disrupt the formation of a new government set to be led by majority Shiites for the first time in modern history. Iraqi forces are eventually supposed to take over responsibility for security — the key to Washington's exit strategy — but they remain under-equipped, ill-prepared to fight insurgents and often make easy targets.

The Shiites have refrained from striking back — mostly at the behest of their most revered leader, Grand Ayatollah Ali al-Sistani (search), who is widely credited with bringing them this far. Al-Sistani wants nothing to impede the Shiites from gaining the political power they have craved in Iraq, and will not allow them to engage in a sectarian war.

It's not that they lack the firepower — nominally disbanded Shiite militias could easily field thousands of tough and effective fighters that could deal a crushing blow to the insurgency.

"We sacrificed a lot of blood, we have to be patient and not drift into a civil war as Ayatollah al-Sistani has said," said Jalal Eddin al-Sagheer, a senior cleric and member of the Supreme Council for the Islamic revolution in Iraq.

Alliance leader Abdel Aziz al-Hakim recently hinted that the Shiites were waiting to take power before dealing with the insurgency. He indicated that a first step would be to identify and purge the security services of any insurgency sympathizers.

"We must depend on the sons of the Iraqi people who believe in the new Iraq, and not on those bad elements that infiltrated the security circles and turned into a problem," al-Hakim told The Associated Press on Sunday. "We can't solve the security issue unless we reconsider the internal structure, to spot those bad elements."

The main Shiite clergy-backed United Iraqi Alliance is seeking the support of other parties to achieve the two-thirds majority required for forming Iraq's new government. The alliance won 140 of the 275-seat National Assembly in the Jan. 30 elections. The main Kurdish alliance won 75 seats. Sunnis — who make up about 20 percent of the population — largely stayed away from the vote.

Finding a way to end the largely Sunni insurgency and soothe the fears of Sunnis who have dominated the Iraqi political sphere for centuries will be the most crucial and complex task for the new government.

There are no official figures available, but an AP count found that 234 people were killed and 429 people were injured in at least 55 incidents from Jan. 1 until election day. Casualties rose in February, which saw at least 38 incidents that resulted in at least 311 deaths and 433 injuries.

Although Monday's bombing did not appear to be an explicit attack against Shiites, most of the victims were Shiites.

In fact, insurgents have stepped up assaults against predominantly Shiite targets in recent weeks, most notably a series of suicide bombings and other attacks left nearly 100 people dead over the two-day Ashoura commemoration that began on Feb. 18.

Nevertheless, Monday's blast was the culmination of hundreds of mass-casualty car bombings that began in earnest with the Aug. 7, 2003 explosion at the Jordanian Embassy in Baghdad, an attack that killed 19 people.

The second deadliest attack since Saddam fell took place on Aug. 29, 2003, when a car bomb exploded outside a mosque in Najaf, killing more than 85 people, including Shiite leader Ayatollah Mohammed Baqir al-Hakim.

Hospital official Ali Hassoun said at least five people had succumbed to wounds overnight, raising the toll to 120 dead. More than 130 others were wounded in the blast.

The attack took place about 9:30 a.m., when the bomber drove into a crowd of hundreds who had gathered for medical checkups, setting off the blast.

"I was lined up near the medical center, waiting for my turn for the medical exam in order to apply for work in the police," Abdullah Salih, 22, said at a hospital where he was being treated for burns on his legs and hands. "Suddenly I heard a very big explosion. I was thrown several yards away."

There was no claim of responsibility for the attack. Police in Babil province said "several people" were arrested, but gave no details.

Following a funeral procession in Hillah, many of the dead will be taken to Najaf for burial on Tuesday.

In other violence, an American soldier was shot and killed Sunday manning a traffic checkpoint in Baghdad, the military said. Another U.S. soldier was killed Monday in a vehicle accident in Beiji, 155 miles north of the capital, the military said.