"We finished our duty and we were walking outside, and suddenly we felt a strong explosion," said the officer.
He said he saw damaged civilian and police vehicles at the scene.
Security forces armed with Kalashnikov assault rifles were deployed on the street where the bombing occurred, preventing most cars from entering, as a truck sprayed water on the site.
Tow-trucks dragged the burned-out remains of two cars down the street and off through traffic, leaving behind another damaged car that was missing most of its windscreen. Journalists were not permitted near the bomb site.
It was the deadliest attack in Iraq since January 27, when a suicide bomber detonated an explosives-packed car outside a hospital in Baghdad, killing 31 people.
Also on Sunday, gun and bomb attacks in other parts of the country killed eight people - four police informants, two policeman and two anti-Qaeda militiamen - and wounded four others, security officials said.
"A group of suspected al-Qaeda gunmen attacked a house in the centre of Baquba around 7.30am," said a police major in Baquba, 60 kilometres north of the capital.
"The attackers killed three women and one man from one family inside the house," the major said, adding that the victims were all police informants.
In Ramadi, 100 kilometres west of Baghdad, police First Lieutenant Anas Mohammed al-Fahdawi was killed by a sticky bomb, police Major Qassem Mohammed said.
Gunmen in a civilian car also targeted a checkpoint manned by police and anti-Qaeda Sahwa (Awakening) militia members in Abu Khamis north of Baquba, killing a policeman and two Sahwa members, a police lieutenant colonel said.
Two Sahwa members were wounded in the attack, he added.
Two more Sahwa members were wounded by a roadside bomb near Samarra, 110 kilometres north of Baghdad, a lieutenant colonel in the Samarra police said.
Police also found the burned body of the criminal court judge Abdelrizak al-Qubaisi in his house in Al-Qaim, 340 kilometres west of Baghdad, Lieutenant Colonel Mohammed al-Akili of Al-Qaim police said.
And the interior ministry said on its website that the bodies of a man and a woman who had been shot in the head were found in Sadr City in north Baghdad. It was unclear when they were killed.
Violence in Iraq is down from its peak in 2006 and 2007, but attacks remain common, and 151 people were killed in violence in January.
-AAP