Civil defence firefighters managed to contain the fire, which damaged several houses and destroyed at least five vehicles, the police added.
Police officers said at least three houses were completely destroyed by the explosion of a cooking gas cylinder that was installed on the rooftop of one of the houses.
Firefighters are still searching for people missing from the collapsed houses, and health officials said the death toll might rise.
(Reporting by Baghdad Newsroom; Editing by Mark Porter.)
Iraqi firefighters put out a fire at the site of a car bomb attack in the Baghdad al-Jadida neighbourhood in this file picture. 