Anger is growing in Baghdad over the government’s failure to protect civilians, after a devastating bombing in a crowded commercial area in the Iraqi capital killed more than 200 people, including many children.

The powerful explosion early on Sunday came near the end of the Islamic holy month of Ramadan, when the streets were filled with young people and families out after sunset.

The death toll from the blast in Karada, a predominantly Shia neighbourhood in central Baghdad, rose to over 200 on Monday morning, as the bodies of more victims were pulled from the rubble.

Hundreds were wounded when a lorry packed with explosives blew up in a busy shopping street filled with people after they had broken their fast.

The Islamic State of Iraq and the Levant (ISIL, also known as ISIS) group claimed responsibility for the attack in a statement circulated by its supporters online.

The group, which has claimed numerous deadly bombings in mainly Shia areas of Baghdad, alleged that a suicide bomber targeted a crowd of Shia Muslims.

Many of the victims were women and children who were inside a multi-storey shopping and amusement mall. Dozens burned to death or suffocated, a police officer said.

There were fears the death toll could rise even further.

Prime Minister Haider al-Abadi condemned the bombing and declared three days of mourning across the country after visiting the scene of the attack.

Video footage posted online showed people jeering and throwing objects at his convoy.

Later on Sunday, protesters marched from Karada to Abadi’s house.

Many Iraqis blame their political leadership for lapses in security in Baghdad that have allowed large amounts of explosives to make their way past multiple checkpoints and into neighbourhoods packed with civilians.

“All the politicians in Iraq are responisble for these blasts, including Abadi,” a woman in Karada told local media.

“We can’t enjoy the Eid; if it isn’t ISIL, it’s al-Qaeda, and if it isn’t the two, it’s the filthy corrupt politics in this country.

“We are being targeted while they are sitting safe and sound in their palaces. They are the ones who are allowing ISIL to come here and murder people.”

Jan Kubis, the UN envoy for Iraq, said the attack was an attempt by ISIL to avenge losses on the battlefield.

“This is a cowardly and heinous act of unparalleled proportions, to target peaceful civilians in the closing days of the holy month of Ramadan,” Kubis said in a statement.

In a separate blast also on Sunday morning, at least five people were killed in a popular market in the mainly Shia neighbourhood of al-Shaab.

There were conflicting reports on the cause of the explosion.

Some sources said it was a bombing, while the interior ministry said it was caused by an accidental fire.