KIRKUK, Iraq (AFP) — Ten Iraqi policemen were killed when a massive car bomb tore through a bus in the northern city of Kirkuk on Wednesday underscoring the fragility of recent security gains.

Immediately following the attack Iraqi army units backed by US air support launched a major operation south of the disputed oil-rich city in which they killed two senior members of the Qaeda-affiliated Ansar al-Sunna group.

Major General Torhan Yousuf, deputy police chief of Kirkuk province, told AFP the bomb-laden car had been parked just before the bus passed and that the bomber had then detonated its payload.

"The terrorist who had been driving the car managed to run away and cause the explosion just as the bus was passing," he said, confirming that the blast had killed 10 police and wounded another 22.

The bomber struck as the policemen headed home from protecting an oil installation, causing an explosion of such force that the bus rose off the ground, Yousuf said.

"We think the attack bears the hallmarks of Al-Qaeda," he said. "We estimate the bomb contained 250 to 300 kilograms (550 and 660 pounds) of explosives."

The casualties were members of the Oil Protection Force, a 31,000-strong contingent of Iraqi police that guards infrastructure.

Immediately after the attack police arrested a man who appeared to have filmed the incident, Yousuf said.

Despite the dramatic improvement in security across the country over the past two years, Iraq has seen a spike in attacks in recent weeks that have killed dozens and wounded hundreds more.

Hours before the attack Kirkuk police arrested two alleged senior members of Al-Qaeda in Iraq and charged them with killing more than 30 members of the Iraqi security forces and carrying out scores of kidnappings and bombings.

And immediately after the attack the Iraqi army's elite Force 12 launched a major operation south of the city that the unit's commander said would last until the end of the month and had already killed two senior militants.

"The first operation was carried out with the US air force which killed one terrorist and wounded another while we also killed a terrorist and wounded another," General Abdelamir al-Zaidi told AFP.

"We arrested the two (wounded men) and confirmed that the two who were killed were senior members of Ansar al-Sunna," he said, referring to an extreme Islamist group originally from Kurdistan that is allied with Al-Qaeda in Iraq.

Zaidi said the strikes were the opening volley of an operation expected to last until the end of the month that has already seen Iraqi forces arrest 12 suspected terrorists, including a senior militant from the city of Tikrit.

He said his forces had also discovered a weapons cache containing six roadside bombs, including a massive one weighing 400 kilograms (880 pounds).

Kirkuk, which has a Kurdish majority but substantial Arab and Turkmen minorities, has been a source of at times deadly ethnic tension since Iraqi president Saddam Hussein was toppled in the 2003 US-led invasion.

Saddam had placed Kirkuk outside the Kurdish region of northern Iraq, which has enjoyed wide-ranging autonomy since 1991.

But Iraqi Kurds, many of whom see Kirkuk's oil wealth as vital to the future viability of their autonomous region, have called for the province to be added to Kurdistan.

Wednesday's attack was the worst in Kirkuk since December 11, when 55 people were killed and 95 wounded when a suicide bomber targeted a restaurant near the city, which is 255 kilometres (160 miles) north of Baghdad.

Security has improved dramatically since 2007 when Iraqi and US forces launched offensives against Al-Qaeda militants with the help of local US-financed and trained Sahwa "Awakening" militias.

But insurgents are still able to strike with deadly results. A total of 252 Iraqis were killed in violence in March, almost the same tally as the previous month but up from January, when 191 Iraqis died in unrest.