The blast in Khalis, 80 km (50 miles) north of Baghdad, underscored the challenges Iraqi security forces face as the United States prepares to stop combat operations in Iraq by Aug. 31, 2010.

Violence has fallen to lows not seen since the U.S.-led invasion to topple Saddam Hussein, but militant groups are still capable of carrying out devastating bomb and gun attacks, especially in the north.

Al Qaeda militants continue to operate in ethnically mixed Diyala, often hiding out amongst its thick palm groves.