In one of the deadliest insurgent attacks since 2003, three car bombs ripped through the Baghdad Shia slum of Sadr City yesterday, killing at least 160 people and wounding 238.

The assault, most likely carried out by al-Qaeda, targeted crowded market areas and appeared designed to push Iraq into all-out civil war. The Government immediately declared an indefinite curfew in Baghdad and closed the airport to all commercial flights.

As furious Shias responded to the devastation with a barrage of mortars aimed at Sunni areas, President Talabani — a Kurd — broadcast a national appeal for calm, accompanied by the Sunni Vice-President Tariq al-Hashimi, and the Shia leader Abdul-Aziz al-Hakim. The three men pleaded for an end to sectarian killings.

The bombings came after the release of a UN report on Wednesday that said Iraq’s civilian death toll had reached a new monthly high of more than 3,700 in October.

“It is clear al-Qaeda did this. It is their way to attack innocent people. There are no governmental buildings, no army bases, no security forces attacked. The victims were only innocent civilians,” Abdul Karim Khalaf, the Interior Ministry spokesman, said. “These attacks aim to destroy Iraq and the political process.”

Al-Qaeda is also blamed for the February 2006 bombing of a Shia shrine in Samarra, north of Baghdad, that provoked Iraq’s current wave of tit-for-tat Sunni-Shia violence.

Mr Khalaf said that police had arrested a fourth bomber who was about to blow up his car in Sadr City.

The attackers detonated their vehicles at 15-minute intervals just after 3pm, shattering the Jamila market, al-Hay market and al-Shahidein Square in Sadr City. At about the same time, mortar rounds struck the neighbourhood. As columns of black smoke filled the sky, armed Shia militiamen marched through the blood-stained streets, cursing Sunni Muslims and firing pistols and Kalashnikovs in the air.

Sadr City is a favourite target of Sunni extremists, who view the Shia sect of Islam as illegitimate. The neighborhood, home to more than two million people, is a stronghold of the Shia cleric Moqtada al-Sadr’s al-Mahdi militia. Within minutes of the explosions yesterday, scores of militiamen were setting up checkpoints and cordoning off streets to keep the curious away.

Shia fighters responded by firing ten mortar rounds at the Abu Hanifa mosque, in the Sunni neighborhood of Adhamiyah, killing one person and wounding seven others.

Before the car bombings, about 30 gunmen had launched a three-hour machinegun and mortar assault on the Health Ministry in central Baghdad, which is under the control of Mr al-Sadr’s political movement. Eventually Iraqi security forces, backed by US military helicopters, repelled the rebels.

Even before this burst of violence, Baghdad’s sectarian war had entered a deadly new phase after last week’s kidnapping of up to 150 people — 80 of whom are still missing — from the Sunni-controlled Ministry of Higher Education.

The kidnapping was followed within days by the abduction of a Shia Deputy Health Minister and several senior Shia and Sunni government officials have dodged assassination attempts since Monday. In the tense atmosphere, politicians are breaking into heated quarrels in parliament.

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