(Updates with U.S. military, mayor)

MAHMUDIYA, Iraq, April 8 (Reuters) - At least 15 people were killed and 25 wounded on Sunday in a large blast in the town of Mahmudiya, 20 miles (30 km) south of Baghdad, police and local officials said.

An official at Mahmudiya General Hospital, Yehya Najm, confirmed the death toll and said it had received 30 wounded. Several bodies were still buried in the rubble, he said.

Police said the blast was caused by a Katyusha rocket, but the town's mayor, Muaid al-Amiri, said it was a car bomb that targeted industrial workshops. He said 17 people were killed and 26 wounded. One multi-storey building was completely demolished.

U.S. military spokesman Lieutenant-Colonel Christopher Garver said initial reports indicated it was a roadside bomb.

(Reporting by Aseel Kami, Yara Bayoumy and Dean Yates)

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