A car bomb has killed 10 people and wounded 31 others in the northern Iraqi town of Tal Afar, Iraqi police and the US military say.

The explosion, the latest in a series that have rocked the country in weeks, took place outside a car dealership firm on Saturday.

Tal Afar is in Iraq's volatile Nineveh province, where Sunni al-Qaeda fighters still operate despite several security crackdowns aimed at stamping them out.

The town is halfway between the Syrian border and the city of Mosul, which the US military considers the last remaining urban bastion of al-Qaeda in Iraq.

A US statement said the car bomb was driven by a suicide bomber, but Iraqi police said the car was parked.

Fighters have shown themselves still capable of carrying out large scale attacks across the country, but violence has been falling in recent months to its lowest level since the US-led invasion in 2003.

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