BAGHDAD, Iraq - At least 78 people were killed and more than 150 wounded Monday after two nearly simultaneous bombs struck a predominantly Shiite commercial area in central Baghdad in the deadliest attack in two months, officials said.

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The first blast occurred shortly after noon when a bomb left in a bag placed among the stalls of vendors peddling DVDs and secondhand clothes exploded in the Bab al-Sharqi area between Tayaran and Tahrir squares.

It was followed almost immediately by a parked car bomb just feet away. A suicide bomber killed at least 63 people in the same area last month.

Deputy Health Minister Hakim al-Zamili said at least 78 people were killed and 156 were wounded.

The explosions left body parts strewn on the bloodstained pavement as black smoke rose into the sky. Iraqi police sealed off the area as ambulances rushed to the scene to evacuate the victims.

The bombings were a further sign of what appears to be a renewed campaign of Sunni insurgent violence against Shiite targets. Last week, 142 Iraqis were killed or found dead on Tuesday alone, including 65 students at a leading Baghdad university who died in twin car bombings.

Monday's death toll made it the single most deadly attack against civilians in Iraq since Nov. 23, when a series of car bombs and mortar attacks by suspected al-Qaida in Iraq fighters in Baghdad's Sadr City Shiite slum killed at least 215 people.

Hours earlier Monday, gunmen killed a female teacher as she was on her way to work at a girls' school in the mainly Sunni area of Khadra in western Baghdad, police said, adding that the teacher's driver was wounded in the drive-by shooting.

The two US Marines were killed Sunday in separate attacks in the Anbar province, an insurgent stronghold west of Baghdad, the military said. The deaths came a day after 25 US troops were killed Saturday in the third-deadliest day since the war started in March 2003 - eclipsed only by the one-day toll 37 US fatalities on Jan. 26, 2005, and 28 on the third day of the US invasion.

The heaviest tolls on Saturday came from a Black Hawk helicopter crash in which 12 US soldiers were killed northeast of Baghdad as well as an attack on a provincial government building in the Shiite holy city of Karbala that left five US troops dead.

The violence underscores the challenges faced by US and Iraqi forces as they seek to rein in Sunni insurgents and Shiite militias that have made the capital and surrounding areas a battleground.

Meanwhile, two government officials on Sunday said Iraq's prime minister dropped his protection of an anti-American cleric's militia after being convinced by US intelligence that the group was infiltrated by death squads.

Prime Minister Nouri al-Maliki's turnaround on the Mahdi Army was puzzling because as late as Oct. 31, he had intervened to end a US blockade of Sadr City, the northeast Shiite enclave in Baghdad that is headquarters to the militia.

Shiite militias began taking revenge after more than two years of incessant bomb and shooting attacks by Sunni insurgents.

Sometime between late October and Nov. 30, when the prime minister met President Bush, al-Maliki was convinced of the truth of American intelligence reports which contended, among other things, that his protection of radical cleric Muqtada al-Sadr's militia was isolating him in the Arab world and among moderates at home, two government officials said.

"Al-Maliki realized he couldn't keep defending the Mahdi Army because of the information and evidence that the armed group was taking part in the killings, displacing people and violating the state's sovereignty," said one official.

Both he and a second government official who confirmed the account refused to be identified by name because the information was confidential. Both officials are intimately aware of the prime minister's thinking.

"The Americans don't act on rumors but on accurate intelligence. There are many intelligence agencies acting on the ground, and they know what's going on," said the second official, confirming the Americans had given al-Maliki overwhelming evidence about the Mahdi Army's deep involvement in the sectarian slaughter.

Last Friday, in a bid to fend off an all-out American military offensive, al-Sadr ordered 30 lawmakers and six Cabinet ministers under his control to end their nearly two-month boycott of the government. They were back at their jobs Sunday.

Al-Sadr had already ordered his militia fighters not to display their weapons. They have not, however, ceded control of the formerly mixed neighborhoods they have captured, killing Sunnis or forcing them to abandon their homes and businesses.

The first government official said al-Maliki's message to al-Sadr was blunt.

"He told the sheik that the activities of both the Sadrist politicians and the militia have inflamed hatred among neighboring Sunni Arab states that have been complaining bitterly to the Americans," the official said.