A vehicle packed with explosives struck a busy street in Baghdad's southwestern al-Bayaa neighbourhood shortly before sunset Thursday, targeting market stalls and car dealerships.
Officials initially reported a death toll of at least 15, but security and medical sources revised the number of deaths up to more than 48, with at least 60 others injured.
Mobile phone footage reportedly from the scene showed charred bodies lying in the road, with car alarms and sirens screeching in the background.
Isis claimed responsibility for the attack through its Amaq news agency, adding that that the Sunni organisation had targeted Shia Muslims.
Another four attacks in and around Baghdad on Thursday killed eight people and wounded around 30, police and medical officials said.
Two other bombs have hit different Shia neighbourhoods of the city in the last two days.
The extremist group has carried out frequent attacks in both Baghdad and other areas of Iraqi since US-backed Iraqi coalition forces began a major operation to oust Isis from the northern city of Mosul in October.
The suicide and car bombings are designed to show the group is still capable of inflicting death and destruction, distracting from their military setbacks.
In 2016 the extremists lost more than a quarter of the territory they control across Iraq and Syria, analysis from IHT Markit shows.
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