The US suffered its worst mass casualties in Iraq for more than a year yesterday when five soldiers were killed by a suicide truck bomb outside a police compound in Mosul.

Two Iraqi policemen also died and at least 20 were wounded in the explosion after the truck – under a hail of gunfire – rammed into a sandbagged wall surrounding the national police headquarters in the northern city, the US military said. Iraqi police put the wounded toll at 70 people and said that five Iraq and two US armoured vehicles had been destroyed.

General Ray Odierno, the top US commander in Iraq, told The Times that al-Qaeda activities in Mosul could delay a plan to pull US combat forces out of the city by the end of June. Under a security agreement between Baghdad and Washington, all combat forces are due to leave Iraqi cities within that timeframe.

Iraq's Interior Ministry said that the authorities had been warned of yesterday's attack, which involved 1,000kg of explosives, but were unsure when it would happen.

US and Iraqi forces opened fire on the truck after it ignored a request to stop at a checkpoint on the approach to the base.

"The truck exploded 50 metres before reaching its target," Major General Abdul Karim Khalaf, the Interior Ministry spokesman, said. The force of the blast flattened three buildings close to the police headquarters, he added.

At least two people suspected of being involved in the attack have been arrested and an investigation is under way, the US military said.

Mosul, Iraq’s third largest city, 240 miles north of Baghdad, is regarded as al-Qaeda’s last urban stronghold in the country after the militants were pushed out of Baghdad and the surrounding belts.

Ethnic divisions run deep in Mosul, which is inhabited by a mix of Kurds, Sunni Arabs, Christians and other minorities. This has helped insurgent groups to remain effective. They are also known to retreat to hideouts in the remote and mountainous region outside the city.

Abu Adwer, a Christian in his 30s who lives in Mosul, said security was as bad now as it was before attempts by the authorities to crack down on the violence. “We had several car bombs in recent days. They target anyone: Iraqi police, army, or the Americans,” he said. Fewer assassinations were taking place, however.

US casualties have fallen dramatically over the past 18 months as a result of improved security following a surge of 30,000 extra troops into the country. A spike in violence over the past week, however, has recalled dark memories of the bloody days of sectarian conflict from 2004 to 2007.

Yesterday’s blast was the deadliest single bombing attack for the US military since five soldiers were killed by a suicide bomber in March 2008. At least 4,270 US servicemen and women have been killed in Iraq since the March 2003 invasion. Tens of thousands of Iraqis have perished.

Times Recommends

• Should Knox’s trial even have reached the courtroom?
• 'Was it real?' The US bailout nightmare
• Iranian opposition plays the long game