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BAGHDAD, July 8 (Reuters) - The death toll from Saturday's truck bomb attack in a market in the northern Iraqi town of Tuz Khurmato may be as high as 150, local officials said on Sunday.

Local police and the mayor, Mohammed Rasheed, said the confirmed death toll was 130, with 250 wounded. But police said 20 people were still missing and presumed dead.

Rasheed said the truck bomb destroyed about 50 small shops and 50 houses in the largely Shi'ite Muslim town. On Saturday night, Rasheed had put the death toll at 115.

A death toll of 150 would make it one of the single deadliest insurgent bombings in Iraq since the U.S.-led invasion in 2003.

Iraqi officials have blamed Sunni Islamist al Qaeda for the attack.

Many of the victims, women and children who were out shopping at the time, were buried under rubble and it took rescuers hours to dig out their bodies.

The bombing was a blow to a U.S.-backed security crackdown in Iraq and underscored the ability of militants to stage large-scale attacks despite the arrival of nearly 30,000 additional U.S. troops.

Tens of thousands of U.S. and Iraqi soldiers have been on the offensive in and around Baghdad, partly to target car bomb factories that military commanders say are run by al Qaeda.

The offensive has driven many militants away from the capital to areas where the troop presence is not as heavy.

U.S. officials blame most big car bombings on al Qaeda, which they say is trying to spark full-scale civil war between Iraq's majority Shi'ites and minority Sunni Arabs.

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