Iraqi Prime Minister Nouri Maliki has described Saturday's bombing in Amirli, northern Iraq as a "heinous crime".
Rescuers are still searching for survivors of the attack, which officials now say killed 130 people and injured 240 others, many seriously. Victims were taken to five hospitals in the region around Amirli
Mr Maliki blamed insurgents for the attack, saying their actions were showing signs of desperation.
The US commander in Iraq, Gen David Petraeus, said he expected a series of similar-scale attacks in coming weeks.
He said Sunni extremists would seek to pull off attacks to "grab the headlines", he told the AP agency.
Local officials suggested that the attack in Amirli bore the hallmarks of Sunni insurgents, adding that the attackers could have chosen the small town after fleeing from increased US operations in the town of Baquba, to the south.
"Because of the recent American military operations, terrorists found a good hideout in Salaheddin province," Ahmed Jubouri, an aide to the province's governor, told AP.
An extra 30,000 US troops have been deployed in Iraq as part of a "surge" strategy designed to increase security.
Buildings destroyed
About 20 people in Amirli are still said to be missing, a day after the powerful truck bomb hit the town's busy marketplace.
Local officials confirmed that 20 houses have completely collapsed, while another 20 were damaged and 50 market shops were destroyed.
It was the deadliest single attack in Iraq since April, correspondents say.
Amirli's remote location meant that rescuers were forced to move injured people to Tuz Khurmato, the nearest major town, some 45km (28 miles) away.
Some were said to have died on the way to get treatment, while others were taken on to Kirkuk, the largest city in the region.
Amirli and Tuz Khurmato are based in an ethnically-mixed area of northern Iraq, home to a large Shia Turkoman community.
Ethnic issues in the region are more subtle in the areas around Kirkuk than in some other parts of Iraq.
Kirkuk, the major town in the area, lies outside Iraqi Kurdistan but is claimed by many Kurds for their national capital.
A referendum on the status of Kirkuk province is due to take place by the end of this year.
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