A blast went off in the Karrada district of central Baghdad on Wednesday night, virtually destroying Mount Lebanon Hotel and damaging a number of houses and offices.

At least 29 people were killed and several injured.

"It's a scene from hell here," CNN quoted its Baghdad Bureau Chief Jane Arraf as saying.

The blast was believed to have been caused by a car bomb. Bystanders worked frantically to pull victims from the rubble, digging with their bare hands. TV footage showed trees, cars and buildings on fire.

It came as US-led coalition forces began Operation Iron Promise, a citywide sweep for insurgents, almost one year after the US invaded Iraq.