BAGHDAD - Only hours after Iraqi troops had paraded in celebration of taking control of their cities from U.S. troops, militants mounted their first challenge to Iraq's new era with a car bombing yesterday that claimed the lives of at least 33 people and wounded 97 others in Kirkuk.

The bloodshed in the northern Iraq city that sits atop lucrative oil reserves and is the prize in an Arab-Kurdish power competition raised doubts about whether Iraqis could fill the security vacuum after the American departure.

The parked car exploded at a vegetable market in Shorja, a Kurdish section of Kirkuk, according to police and medical sources who provided the casualty figures.

The bombing came hours after the U.S. military announced that four American soldiers had been killed in combat Monday.

The market attack also followed last week's suicide truck bombing that killed nearly 80 people in Taza Khurmatu, a Shiite Turkmen town just south of Kirkuk. Both blasts pointed to an effort to fan ethnic tensions in an oil-rich area that Kurds wish to claim as part of their self-governing region in northern Iraq and Arabs want tied to the government in Baghdad.

The blast marred a day that Iraqi Prime Minister Nouri al-Maliki had hailed as a victory and a milestone on the way to the withdrawal of all U.S. forces by the end of 2011.

In Washington, President Obama declared yesterday that "Iraq's future is in the hands of its own people," warning of more violence in the days ahead but signaling optimism that Iraq will prevail as a stable, sovereign nation.

"The Iraqi people are rightly treating this as a cause for celebration," Obama said. "The future belongs to those who build, not to those who destroy."

Obama predicted new flare-ups of violence, citing the "senseless bombing" in Kirkuk. "Make no mistake," Obama said, "there will be difficult days ahead."

The government staged holiday military marches across Iraq as its forces took over responsibility from the U.S. forces, who primarily have been relegated to bases on the periphery of cities or to rural areas. A U.S.-Iraq security agreement, signed at the end of last year, had called for all American combat troops to be out of population centers by June 30.

"This day, which we consider a national celebration, is an achievement made by all Iraqis," Maliki told the nation on state television.

"Those who think that Iraqis are unable to defend their country are committing a fatal mistake," he said.

In Kirkuk, the market attack appeared to undermine such confidence. The blast gutted more than 40 stores, reducing at least a dozen establishments to rubble.

Azad Khudur, a 33-year-old shopper, stood at the market's entrance, near a few burning cars.

"The bombing is a message to the Iraqi people that the terrorists are able to attack at any time and at any hour because of the weakness of security forces," he said.

When he heard the explosion, fruit seller Kareem Ameen said, he came running and a friend told him not to bother looking for his two sons. Their bodies had been ripped apart and scattered.

Ameen, 78, raised his hands toward the sky and yelled: "What wrong did we do, God? Is it because we are Iraqis? . . . Tomorrow is unknown with Iraq on the brink of the [American] pullout."

The province's security forces often have found themselves embroiled in Kirkuk's Arab-Kurdish divisions. The predominantly Arab 12th Iraqi Army Division replaced a Kurdish-led brigade a year ago, angering many in the Kurdistan region. The Arab commander of the division has said the government intends to take control of security throughout the province, including areas under the control of Kurdish peshmerga fighters sent from the north.

Leading up to yesterday, local officials and residents had expressed nervousness about what the symbolic date meant for the region and other areas that both Arabs and Kurds believe is rightfully theirs.

"The Kurds will try in different ways to legitimize the integration of Kirkuk into Kurdistan. This will generate violence," schoolteacher Tariq Hatim, 34, said before yesterday's celebrations.

Another source of discontent is the Kurdish parliament's approval last week of a constitution that would declare areas in Kirkuk, Nineveh and Diyala provinces part of the semiautonomous Kurdish region.

U.S. diplomats and American commanders have identified the disputed areas in the north as one of the country's major problems. In an interview yesterday, U.S. Ambassador Chris Hill said the embassy believed it could help promote reconciliation between Arabs and Kurds.

"I think you can look for the American Embassy to try to play a helpful role in that process, as long as we are welcome to do so, and we believe we are," Hill said.

Mindful of recent attacks that have killed more than 200 people, the ambassador expressed his confidence in the Iraqi security forces' ability to defeat militant groups.

"I believe, and I think this opinion is shared by the U.S. military, that the Iraqi forces are ready," Hill said.

This article contains information from the Associated Press.