BAGHDAD, Iraq — A car bomb exploded today in the Shiite holy city of Najaf, killing at least 10 people and threatening to heighten sectarian tensions. Shiite politicians also blocked a bid to have parliament try to break the deadlock on forming a new government.

Elsewhere, the U.S. military announced the arrest of a top insurgent leader believed to have been responsible for last year's kidnapping of Italian journalist Guiliana Sgrena.

About 30 people were wounded in the Najaf car bombing, which occurred about 300 yards from the Imam Ali shrine, police chief Maj. Gen. Abbas Miadal said. The shrine is among the world's most sacred sites for Shiite Muslims and contains the tomb of the Prophet Muhammad's son-in-law, Imam Ali.

Dr. Munther al-Ethari, director of the city's health services, said 10 people were killed.

Such attacks are rare in Najaf, which is tightly controlled by police and Shiite security guards. Even though the casualty figure was modest by Iraqi standards, such attacks within Najaf are seen by Shiites as a grave provocation because of the city's stature in the religious sect.

The bombing Feb. 22 of the golden dome of a Shiite shrine in Samarra triggered a wave of reprisal attacks against Sunni mosques and clerics, plunging the country to the bring of civil war.

Following today's blast, Iraqi police and army sealed off the center of Najaf and ordered people to leave the area for fear other bombs may be hidden there. The bomb exploded on a street which leads to the city's massive cemetery. The route is often used for funeral processions by Shiites from throughout the country who come to Najaf to bury their dead.