Insurgents detonated a car bomb Thursday near the municipal government complex in the Iraqi city of Haditha, killing 10 people and injuring dozens of others, as interim Prime Minister Ayad Allawi sought to reassure Iraqis during a fresh surge of attacks that security is improving.

The bombing in Haditha, a crossroads town about 125 miles northwest of Baghdad that was once deeply loyal to deposed president Saddam Hussein, bore the hallmarks of the powerful explosion that killed 11 people here in the capital a day earlier. The target was a seat of political power, and the victims were primarily civilians. Of those killed, three were members of the Iraqi police force and the rest apparently were bystanders. Iraqi officials said 27 people were wounded.

A few hours after the bombing, Allawi announced the creation of a domestic security agency to help gather intelligence against the insurgency and to coordinate efforts against it. While giving few details of how the agency would operate, Allawi told reporters that the General Security Directorate would "annihilate these groups" that make up the resistance.

"The security situation is in continuing improvement," Allawi said during a news conference, flanked by the defense minister, Hazim Shalan, and the interior minister, Falah Naqib. "We will not spare any effort to defeat our enemies."

On Wednesday night, Iraqi police discovered a headless body dressed in an orange jumpsuit floating in the Tigris River near the town of Baiji, about 130 miles north of Baghdad. Earlier in the day, a group associated with Jordanian militant Abu Musab Zarqawi, who U.S. officials say has ties to al Qaeda, announced it had killed one of two Bulgarian hostages it was holding.

Bulgarian officials are using fingerprints to determine if the recovered body is that of Georgi Lazov, the hostage featured in a videotape broadcast by the al-Jazeera satellite channel kneeling in front of three masked men. The group is demanding that all Iraqi prisoners be freed.

Allawi's news conference appeared designed to highlight his interim government's progress in building an effective security force since assuming political power from the U.S.-led Coalition Provisional Authority on June 28. The news conference came as insurgent bombings and political assassinations have disturbed the relative calm following the handover, prompting fresh worries among many Iraqis about the country's future.

Allawi, once the CIA's favored candidate to lead post-Hussein Iraq, has won over many Iraqis by moving quickly to address the tenuous security situation in much of the country. Soon after the handover, Allawi issued an emergency decree that gave him broad martial powers in areas hardest hit by the insurgency. He also intends to offer amnesty to some members of the resistance. He said his cabinet was debating the measure but that he expected it to be ready next week.

But Iraqi security forces, while showing signs of improvement, remain poorly equipped, understaffed and inadequately trained. Although the handover officially ended the 15-month occupation, the 138,000 U.S. troops in Iraq are the principal guarantors of the government's security. Meanwhile, insurgents continue to target Iraqis who have taken on additional duties following the handover. In the past two days, at least seven police officers and national guardsmen have been killed.

The insurgency has also continued to kidnap foreigners, often demanding that the captives' home governments withdraw their forces from Iraq. On Thursday, Allawi said he called the Philippine president, Gloria Macapagal Arroyo, to ask her to reconsider her decision to begin withdrawing her country's 51 soldiers ahead of schedule. Arroyo had ordered the withdrawal after insurgents threatened to kill a Filipino hostage unless she did so. Allawi did not say whether his appeal was successful.

Naqib, the interior minister, also said there had been progress on security. He said recent roundups of suspected organized crime cells and insurgent groups had led to the arrest of 15 men who may have links to al Qaeda or Ansar al-Islam, described by the U.S. government as a terrorist organization with ties to al Qaeda. He said the men were cooperating with Iraqi officials.

Allawi outlined plans to bolster his security forces, in part by reaching out to other countries. Beginning next week, he is scheduled to travel to eight Arab countries, seeking military equipment and other aid, including troops in some cases.

Allawi indicated he also intended to work with neighboring countries -- Jordan, Syria and Saudi Arabia are on his itinerary -- to tighten security in border regions. An unknown number of foreign Arab fighters have slipped into Iraq in the past 16 months intent on battling the U.S. presence here.

Allawi said he would not allow troops from neighboring countries to serve in Iraq but had not ruled out hosting soldiers from other Arab nations.

"It is a very simple, candid, frank message," Allawi said, describing what he'll say to leaders in neighboring countries. "It is that our cooperation must be founded on mutual interests and respect."

Allawi said his first round of travel would end before the 1,000-member Iraqi National Assembly convenes this month to select a smaller committee to serve as a kind of interim legislature. The committee will help chart Iraq's course toward national elections, planned for January.

Allawi called the assembly "a cornerstone step in the transition to democracy" and vowed that the elections would be held on schedule. Iraqi and U.S. officials have said they believe the insurgency will lose much of its political force once the country elects its own government, replacing the one arranged largely by the United Nations and the U.S. occupation authority.

Despite Allawi's assurances, the calm that immediately followed the handover appears to be over. Car bombings over two consecutive days have killed at least 14 Iraqi civilians, and insurgents renewed their attacks on senior Iraqi politicians by killing the popular governor of Mosul on Wednesday in a highway ambush north of Baghdad.

Insurgents also attacked two oil pipelines, one north of Baghdad and one in the far south. It appeared that neither attack would affect Iraq's oil production.

In Baiji, 120 miles north of Baghdad, insurgents set a pipeline along the Tigris River ablaze. U.S. military officials said the site is a frequent target. It is one of three pipelines that carry crude from Kirkuk to Iraq's largest refinery in Baiji.

Capt. Daniel Young, an engineer assigned to the 1st Infantry Division headquarters in Tikrit, said the cause of Thursday's fire was not known. But he said the Baiji refinery, which is operating at half capacity while undergoing scheduled repairs, usually stores enough oil to avoid a shutdown.

"Typically these breaks get repaired in about five days," Young said. "The refinery won't shut down because of it."

Correspondent Doug Struck in Tikrit contributed to this report.

Iraqis survey the scene of a car bomb explosion in Haditha, a crossroads town once deeply loyal to Saddam Hussein.