(Raises toll, adds details on attack)

By Dean Yates

BAGHDAD, Feb 25 (Reuters) - A suicide bomber wearing a vest packed with explosives killed at least 20 people and wounded 30 in a Baghdad college on Sunday.

Guards stopped the bomber in the reception lobby of the Baghdad Economy and Administration College but the man managed to blow himself up, police said. Most of the victims were students, witnesses said.

The attack was among a string of car bombings and rocket salvos to hit Baghdad on Sunday as insurgents defied efforts by U.S. and Iraqi security forces to stabilise the capital.

The college lies near Sadr City, an eastern Baghdad district that is the stronghold of the Mehdi Army militia of anti-American Shi'ite cleric Moqtada al-Sadr.

Insurgents have repeatedly attacked universities and colleges in Baghdad, trying to strike fear into the city's middle class. Many college professors and intellectuals have also been killed.

In a bold challenge to the security crackdown in Baghdad, regarded as a last chance to reverse Iraq's descent into civil war, gunmen had stormed an Iraqi police checkpoint near Baghdad airport on Saturday, killing eight policemen.

Shi'ite Prime Minister Nuri al-Maliki expressed optimism on Saturday about the 10-day-old security plan and said U.S. and Iraqi forces had killed about 400 suspected militants since it began.

On Sunday, rockets and mortar bombs crashed into a market in a Shi'ite area in southern Baghdad and there were conflicting reports about casualties, police said.

One police source said 10 people were killed in the attack in the Abu Dsher area of Doura neighbourhood. Two other police sources said no more than three people had been wounded.

A car bomb killed one person and wounded four in central Baghdad, not far from the Iranian embassy, police said.

Police said the diplomatic mission did not appear to have been the target. The embassy compound was not damaged.

Another car bomb exploded along a commercial street in central Baghdad, in the Karrada district, sending a plume of black smoke into the air. One police source said four people were wounded while another said there were no casualties.

DEATH SQUAD KILLINGS DROP

U.S. forces have set up joint security outposts with Iraqi forces around the city and the crackdown does appear to have reduced the number of bodies found tortured and shot in the city, the apparent victims of death squads.

A typical daily body count had been around 40 or 50 a day in recent months but since the start of the plan it has been between five and 20. However, U.S. commanders say it will take months to judge the success of the offensive.

A fuel tanker rigged with explosives killed 45 people on Saturday when it blew up near a Sunni mosque in western Iraq, after the mosque's imam had criticised al Qaeda militants at Friday prayers, police and residents said.

The truck bomb in Habaniya, in the restive western province of Anbar, was unusual in targeting a Sunni Muslim mosque.

Some Sunni tribal leaders in Anbar are leading a campaign to fight al Qaeda, which is deeply entrenched in the province, and the attack signals an escalation of the power struggle in an area where U.S. troop reinforcements are soon to be deployed.

U.S. President George W. Bush is sending 21,500 extra troops to Iraq to help with the clampdown in Baghdad. Most are heading for the capital although 4,000 will be sent to Anbar, the most dangerous province in Iraq for American forces. (Additional reporting by Mussab Al-Khairalla, Aseel Kami, Ibon Villelabeitia and Claudia Parsons)

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