BAGHDAD - Iraqi police say a bomb exploded in a parked car in a bustling section of downtown Baghdad early Wednesday, killing three people and wounding 14 others.

The attack marked the third consecutive day of morning rush hour blasts in the Iraqi capital. The attack occurred around off al-Nasir Square in central Baghdad - a busy neighbourhood of shops, pharmacies and photography stores.

Police say two officers are among the wounded.

The officials spoke on condition of anonymity because they were not authorized to release the information.

The other recent attacks in the Iraqi capital have killed more than 30 people and wounded some 70 others.

Despite security gains in recent months that have seen violence drop sharply in the capital, there appears to be an uptick in small-scale bombings in the past week. Attacks have targeted Iraqi police, army patrols, government officials heading to work or commuters.

The heightened violence comes as U.S. and Iraqi officials try to hammer out a final agreement on a security deal that would keep U.S. troops in Iraq until the end of 2011.

The security pact has drawn sharp criticism, especially from within the majority Shiite community. Without an agreement or a new mandate, the U.S. military would have to cease operations in Iraq.

In an attempt to derail the pact, 10 Iraqi insurgent groups have agreed to ramp up attacks against U.S. and Iraqi forces, according to the site Intelligence Group, an Internet monitoring service.