By Imad al-Khuzaie
DIWANIYA, Iraq, July 3 (Reuters) - A bomb in a small truck exploded in a market in the Iraqi city of Diwaniya on Tuesday, killing 40 people, and a bomb blast killed four more near the city of Kerbala, police and officials said - the latest in a series of sectarian attacks.
The Diwaniya bombing was near a Shi'ite mosque where pilgrims gather on their way to Kerbala to celebrate the birthday of one of the most important imams, al-Mahdi, this week.
In Diwaniya, 150 km (93 miles) south of Baghdad and 130 kms south east of Kerbala, police announced a partial curfew and blocked all entrances to the city as they searched for more explosives. Two police sources said 75 people had been wounded.
Attacks have increased in Iraq in recent weeks, raising fears that the country may slip back into widespread violence between Iraqi Sunni and Shi'ite Muslims.
"All of a sudden the explosion happened, I felt the power of the blast, it was so strong, it broke all the glass in my windows," butcher Ahmed Hassan, 23, said in his shop close to where the explosion took place.
"I smelled blood and gunpowder."
He said a fellow shopkeeper had been taking dead bodies to the hospital morgue.
"We even saw body parts on the top of building, we took them down," said Hassan, looking pale and confused as he swept glass from his shop floor.
SPIKE IN VIOLENCE
Shoes, toys and vegetables were scattered across the ground and at least 15 shops were destroyed, a Reuters reporter at the scene in Diwaniya said. Two burnt-out vehicles were abandoned near the site of the explosion. Witnesses said the bomb appeared to have been planted in a delivery truck.
Earlier in the day, two bombs in a vegetable wholesale market killed four people and wounded 29 near the central Iraqi city of Kerbala, hospital and police sources said.
"The bomb happened because of sticky bombs attached to two parked cars which went off separately," said Hussein Shadhan, a provincial council member, who was at the hospital.
"Four of the wounded people are seriously injured and their medical situation is very critical," he said.
Reuters pictures showed pulvervised tomatoes and bits of salad covering the blackened market floor. People picked their way through twisted pieces of metal and broken wooden crates.
Hospital and police sources said earlier they believed the attack had also been targeting Shi'ite pilgrims on their way to Kerbala.
Last month at least 237 people were killed and 603 wounded mainly in bomb attacks, according to a Reuters tally, making June one of the bloodiest months in Iraq since U.S. troops withdrew at the end of last year.
The deadliest attack occurred on June 13 when bombers targeting Shi'ite pilgrims killed more than 70 people.
Sunni insurgents often attack Shi'ite targets to try to reignite sectarian violence that killed tens of thousands of people in 2006-2007. Iraq's al Qaeda wing has claimed some of the recent bombings against Shi'ites. (Additional reporting by Suadad al-Salhy and Ali al-Rubaie; Writing by Sylvia Westall; Editing by Louise Ireland)