By Alister Bull

BAGHDAD, July 15 (Reuters) - Ten people were killed by a car bomb in central Baghdad, Iraqi police said, raising the number of violent deaths around the country on Sunday to at least 25.

A top U.S. officer said police units in Iraq were still split along sectarian lines and only action by Shi'ite Prime Minister Nuri al-Maliki's government could change that.

Twenty-five people were wounded by the blast which ripped through shops and restaurants near Hussein Square in Baghdad's mainly Shi'ite Jadriya district. Two women were among the dead.

In other violence, seven Kurdish guards were killed near the Iranian border in normally calm northern Iraq, in an attack police and a local official blamed on al Qaeda-linked militants.

U.S. and Iraqi forces have launched a major clampdown in and around Baghdad to drive out militants blamed for deadly bomb attacks which are fanning sectarian hatred.

U.S. commanders warn that Iraqi forces are not ready to handle security alone, in part because of tension between ordinary Iraqis and police, who the United States says have often been infiltrated by Shi'ite militia.

"There is a certain element of the Iraqi security forces and in particular the Iraqi police ... that have had shortfalls in terms of loyalty ... to the central government," Rear Admiral Mark Fox, the top military spokesman in Iraq, told a news conference.

WANT TROOPS OUT

Many Americans want their troops to come home and have lost confidence in the Iraqi government's will to stem the bloodshed between majority Shi'ite and minority Sunni Arabs. Last week, the Democratic controlled House of Representatives voted to pull combat troops out by April.

U.S. President George W. Bush says he will withhold judgment until September, when his top officers in Iraq, General David Petraeus and Ambassador Ryan Crocker, deliver a watershed review of progress to U.S. lawmakers.

They are expected to acknowledge only mixed results since the last of 28,000 extra troops ordered to Iraq by Bush arrived in the country last month.

Fox said it would not be easy to win back the trust of Iraqis who regard their police with suspicion.

"It takes time and it takes patience, and I also think it takes commitment on behalf of the Iraqi government," he said.

Maliki said on Saturday that Iraqi security forces were ready to take over from the Americans at "any time", but also stressed that they needed more training.

Iraq's top military spokesman, Brigadier General Qassim Atta, said at the news conference with Fox that Maliki's remark was supposed to be a "general" observation.

The U.S. military said last week that the number of Iraqi army battalions that could fight without U.S. backing had fallen to six from 10 in the last two months because of war fatigue. Fox also said the Iraqi forces were patchy.

"There are some well-trained, well-equipped and well-led units in the Iraqi security force. But there are also units that still need to improve," he said.

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