(Adds U.S. military comment on withdrawals, Sadr statement)

By Michael Holden

BAGHDAD, March 7 (Reuters) - Iraqi police on Friday raised to 68 the death toll in coordinated bombings in a packed shopping area in central Baghdad on Thursday, making it the deadliest attack in the capital for nine months.

The bombs wounded 120 people, making it the worst attack in Baghdad since 87 were killed in a car bombing at a mosque last June. U.S. and Iraqi officials blamed the attack on al Qaeda.

Hours before the bombings the U.S. military said a brigade of 2,000 soldiers was leaving Baghdad, the second to leave as part of planned troop withdrawals, and would not be replaced. Another brigade is due to leave Baghdad later.

"There is no intent to change our drawdown plans as a result of yesterday's attacks," U.S. military spokesman Colonel Bill Buckner told Reuters via e-mail.

Iraqi and U.S. officials said the first blast had been a roadside bomb in Baghdad's mainly Shi'ite Karrada district, crowded with shoppers and vendors on Thursday evening at the start of the Muslim weekend.

Minutes later, as Iraqi security forces and locals gathered to tend to the wounded, a second, larger bomb exploded. Women and children were among the casualties.

"In this case the U.S. and ISF (Iraq security forces) can do everything right -- and still terrorists can commit heinous acts," military spokesman Lieutenant-Colonel Steve Stover told Reuters via e-mail.

Police and the U.S. military said they believed the second blast was by a suicide bomber but Iraqi security officials said it appeared to have been another bomb planted at the scene.

"This crime shows the hatred of these terrorists against the Iraqi people," Iraqi Prime Minister Nuri al-Maliki said in a statement.

The U.S. military said the bombing was the work of al Qaeda in Iraq and that it knew the cell leader who was responsible.

"This was an evil act committed by evil men," Stover said.

FALL IN VIOLENCE

Violence has fallen sharply across Iraq since 30,000 extra U.S. troops were sent to Iraq last year to quell sectarian violence between majority Shi'ites and minority Sunni Arabs. At the same time a new counter-insurgency strategy was launched.

The decision by Sunni Arab tribal leaders to rebel against Sunni Islamist al Qaeda, and a ceasefire ordered by anti-U.S. Shi'ite cleric Moqtada al-Sadr for his powerful Mehdi army militia have also been key factors in the fall in violence.

On Friday, Sadr issued a rare statement explaining to his followers his long absence from public view. He said he had isolated himself to concentrate on his studies and distance himself from groups that had splintered from his movement.

"I swear that I live with you and among you. I am a part of you. I will not change this unless death separates us," he said in a two-page statement bearing his personal stamp.

Attacks are down by 60 percent since last June, when the extra U.S. troops became fully deployed, but U.S. and Iraqi officials warn that al Qaeda remains a dangerous enemy.

Iraqi government figures showed that civilian deaths in February were up 36 percent from January, the first increase after six months of falling casualty tolls, the result of several large bombings blamed on al Qaeda.

It was against the background of improving security that General David Petraeus, the U.S. military commander in Iraq, announced plans to withdraw five of the 20 U.S. brigades operating in Iraq.

That would reduce overall U.S. troop levels to about 140,000 from around 160,000.

Stover said the latest brigade to leave, part of the extra troops sent in last year, did not cover the Karrada area.

"Neither should you or I blame the unit responsible for the area," he said. (Additional reporting by Khaled Farhan in Najaf; Editing by Tim Pearce)

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