The suicide bombing targetted a recruitment centre at an Iraqi army base called Tamarat near the town of Tal Afar, close to the Syrian border.
A militant coalition led by Al-Qaeda's Iraq branch claimed the blast and identified the suicide bomber as a Saudi.
"A brother... from Mohammed's Peninsula (Saudi Arabia)... wearing an explosives belt plunged this morning into the crusaders' base northeast of Tal Afar and infiltrated among hundreds of recruits before blowing himself up," said the statement on Internet by the Mujahedeen Consultative Council.
The council, established in January, groups seven Sunni Muslim armed factions and is dominated by Al-Qaeda's Iraqi branch led by Abu Musab al-Zarqawi.
In a recent speech aimed at increasing support for the Iraq war US President Bush had singled out Tal Afar as a success story for American and Iraqi forces in their drive to quell the insurgency.
Ten other Iraqis were killed in separate rebel violence across Iraq, seven of them in mortar attacks in south Baghdad which wounded 35 others, while 16 trading company employees were kidnapped by gunmen in the capital.
Shiite tensions
Meanwhile tension rose between powerful Shiite leaders and US forces over a raid on a Baghdad mosque carried out by US-backed Iraqi special forces.
The night raid on Sudnay in northeast Baghdad resulted in the killing of at least 16 Shiites and triggered a raft of anti-US reactions from the dominant Shiite political parties.
Iraq’s President Jalal Talabani has ordered an investigation in the raids. "This is a grave and dangerous incident," he said.
The Shiite United Iraqi Alliance (UIA), which holds the largest bloc of seats in the parliament and controls the government, vociferously condemned the raid which it said targeted a mosque full of worshippers.
"US forces and Iraqi special forces committed a heinous crime by attacking the Mustafa mosque in the neighborhood of Ur," said Jawad Maliki, the number two of outgoing Prime Minister Ibrahim Jaafari's Dawa Party, reading from a statement.
"It is a serious crime with grave political and security implications which aims to provoke civil war in the country." Mr Maliki called on the Iraqi security forces to take full charge of security in the country.
The Shiites maintain the night raid targeted peaceful worshippers in a mosque while the US military said the operation was against an insurgent cell and did not involve any mosque.
US military
"Iraqi commandos and soldiers from the Iraqi counter-terrorism force killed 16 insurgents and wounded three others during a house-to-house search on an objective with multiple structures," the US military said in a statement defending its actions.
The US military admitted that members of the US special forces were present in an advisory capacity and said that "no mosques were entered or damaged during this operation."
Large numbers of weapons were found, including dozens of assault rifles, rocket propelled grenades and launchers, two heavy machine guns and material to make explosives, it said.
A dental technician with the Ministry of Health who had been taken hostage the day before was also rescued. He had been tortured for the last 12 hours, the military added.