An explosion was heard in central Baghdad this afternoon and smoke could be seen rising from an area close to the headquarters of Iraq's US-led administration, witnesses reported.
The blast happened at around 4:35 p.m. (1335 Irish time) and shook doors and windows in the centre of the city.
A cloud of black smoke hung briefly in the air after the blast.
Two US helicopters circled the area near the compound, site of one of ousted leader Saddam Hussein's sprawling palaces.
A spokesman for the US 1st Armored Division, which is responsible for security in the Iraqi capital, said its units had fired mortars at insurgents around the same time as the explosion was heard.
"We fired mortars approximately 20 minutes ago, but not near the compound," said the spokesman.
He said he was not aware of the blast.
The US military's mortar attacks were part of "Operation Iron Hammer", aimed at hitting insurgents who have fired mortar bombs or rockets into the administration's compound on the west bank of the Tigris river several times in the past two weeks.
Over the past three nights, US forces have responded by using heavy weapons and air strikes on several buildings they say were being used by insurgents.