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People gather at the site of a suicide car bomb in the Karrada shopping area, in Baghdad, Iraq on July 3, 2016. Image Credit: REUTERS

Baghdad: A Daesh suicide bomber killed at least 121 people in a busy Baghdad shopping district in the early hours of Sunday, officials said, in the deadliest single attack in the capital this year.

The blast, which ripped through a street in the Karrada area where many people go to shop ahead of the holiday marking the end of Ramadan, also wounded more than 212 people, the officials said.

Watch - GCC and Middle East Editor Layelle Saad reports the latest on Baghdad blast and Daesh:

Prime Minister Haider Al Abadi visited the site of the bombing and vowed "punishment" for its perpetrators, his office said.

The attack set buildings in the area ablaze, reducing some to charred hulks and also torching shops.

Men carried the bodies of two victims out of one burned building and a crowd of people looked on from the rubble-filled street as firefighters worked at the site.

Daesh issued a statement claiming responsibility for the suicide car bombing, saying it was carried out by an Iraqi as part of the group's "ongoing security operations".

The group said the bombing targeted members of Iraq's Shiite majority.

Bombings in the capital have decreased since Daesh overran large areas north and west of Baghdad in June 2014, apparently because the militants were occupied with operations elsewhere.

But the group has struck back against Iraqi civilians after suffering military setbacks, both as revenge and to portray itself as being on the offensive.

In May, the capital was rocked by a series of blasts that killed more than 150 people in seven days.

UAE condemns attacks

The UAE strongly condemned the attack, as well as the recent terrorist attack in Bangladesh.

Shaikh Abdullah Bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation, expressed his strong condemnation of these criminal terrorist acts.

He reiterated the need for collaborative international efforts to counter terrorism in all its forms and manifestations.

Shaikh Abdullah offered his condolences to the victims’ families and expressed his wishes of a speedy recovery for the injured.  

Major setback in Fallujah

With thousands of vehicles moving in and out of the city of Fallujah each day, bombings are difficult to prevent.

But there are also flaws in Iraqi security measures in the city, especially the continued use of fake bomb detectors at checkpoints in the city years after the man who sold them to Iraq was jailed for fraud in Britain.

A video posted on social media Sunday showed men - apparently angry at the government's failure to prevent the attack - throwing rocks toward what was said to be Abadi's convoy.

Iraqi forces completely recaptured Fallujah, a city 50km west of Baghdad, from Daesh a week ago.

Anti-government fighters seized Fallujah in early 2014 and it later became one of Daesh's main strongholds in the country.

Iraqi forces launched an operation in May to recapture the city, one of only two in the country then held by Daesh

The defeat was compounded by a devastating series of air strikes targeting Daesh forces as they sought to flee the Fallujah area.

Iraqi and US-led coalition aircraft destroyed hundreds of Daesh vehicles and killed dozens of fighters in two days of strikes against jihadist convoys after the end of the fighting, officials said.

With Fallujah retaken, Iraqi forces are now setting their sights on second city Mosul, the last major population centre held by Daesh in Iraq.

Initial operations aimed at setting the stage for a final assault on the city have begun, and the US-led coalition is carrying out strikes in the area.

The Pentagon announced on Friday that the coalition had killed two senior Daesh leaders in the Mosul area the week before.

In addition to Mosul, Daesh still holds significant territory in Nineveh province, of which it is the capital, as well as areas in Kirkuk to its west and Anbar to its south.