(Updates casualty toll)

By Sami al-Jumaili

KERBALA, Iraq, April 28 (Reuters) - A suicide car bomber killed 60 people and wounded 170 near one of Iraq's most revered Shi'ite Muslim shrines on Saturday, in an attack likely to inflame sectarian tensions.

The blast occurred at a checkpoint on an approach to the golden-domed al-Abbas shrine, situated among shops and restaurants in the holy city of Kerbala. The area was crowded at the time.

Television images showed a man running down a smoke-filled street holding a lifeless baby above his head. Smoke was rising off the baby. Ambulances had rushed to the blast scene in Kerbala, 100 km (70 miles) southwest of Baghdad.

Salim Khadhim, a provincial health spokesman, said the blast killed 60 people and wounded 170. Officials said local hospitals had to send some of the wounded to nearby cities because they were unable to cope.

"A car entered the checkpoint for the shrine and blew up in the midst of a crowd of people. Shops have been destroyed, a dozen cars caught fire," said Jasim Najim, a nearby shop owner.

The attack bore the hallmarks of Sunni Islamist al Qaeda, which U.S. and Iraqi officials accuse of trying to tip Iraq into full-scale civil war between the majority Shi'ites and minority Sunni Arabs, once-dominant under Saddam Hussein.

The U.S. military commander in Iraq, General David Petraeus, said on Thursday al Qaeda was bent on committing what he called "sensational" attacks designed to fuel more sectarian violence.

Speaking in Washington, Petraeus said al Qaeda was now "probably public enemy number one" in Iraq. The Pentagon previously called anti-U.S. Shi'ite cleric Moqtada al-Sadr's Mehdi Army militia the greatest threat to peace in Iraq.

"DARK FORCES"

"Once again the dark forces and terrorists have targeted the city of Kerbala," Abdulaal al-Yasiry, head of the Kerbala Provincial Council, told state Iraqiya television.

"Security forces do not have adequate training ... The terrorists have started to come up with creative attacks so that it's impossible for police to uncover them."

Kerbala is one of Iraq's best protected cities because of its holy status and major bombings do not happen often. A suicide car bomber killed 40 people at a crowded bus station in the same area on April 14.

The shrine to Abbas Ibn Ali is revered by Shi'ite Muslims because of his loyalty to his half-brother and third Shi'ite Imam, Hussein, grandson of Prophet Muhammad.

Since U.S-led forces toppled Saddam Hussein in 2003, Iraq has been riven by violence that has killed tens of thousands.

The turmoil escalated when suspected al Qaeda militants destroyed one of the holiest shrines to Shi'ites in the Iraqi town of Samarra in February 2006.

Earlier, Sadr called U.S. President George W. Bush the Antichrist and urged him to heed appeals by the opposition Democrats to withdraw from Iraq.

Sadr, whose six ministers quit Shi'ite Prime Minister Nuri al-Maliki's coalition government this month, renewed his demand for a U.S. pullout a day after Bush pledged to veto legislation that would require U.S. troops to begin leaving Iraq by Oct. 1.

Calling Bush "the greatest evil", Sadr said in a letter read out by a Sadrist legislator in parliament that an eventual U.S. pullout would be a "victory for the Iraqi people".

"Here are the Democrats demanding that you withdraw at least with a timetable and you are stubborn against them," said Sadr, whose Mehdi Army militia fought two uprisings against U.S. forces in 2004.

"You are like the one-eyed Antichrist. You look with one eye and refuse to look with the other," he said of Bush.

Bush has refused to set any timetable for a withdrawal, saying it would amount to a "surrender date". More than 3,300 U.S. troops have been killed in the four-year-old war.

Defying the veto threat, the Democratic-controlled Congress this week approved a $124 billion war spending measure that would require U.S. combat troops to leave by March 31, 2008. (Additional reporting by Ross Colvin, Yara Bayoumy and Paul Tait)

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