He is the first New Jersey State Police trooper killed in Iraq.
Kelly, who speaks Arabic, was working to restore local government and services in the former Shiite militia stronghold.
The 48-year-old was on his third deployment to Iraq.
Kelley was assigned to the State Police counterterrorism unit in Hamilton, and also worked with the terrorism task force in Newark
He is divorced and leaves behind two children.
The trooper joined the state police in 1988.
Iraqi officials suspected the bombing was an inside job, and suspicion fell on the headquarters' Shiite guard force. The blast was the second deadly attack to strike Americans promoting municipal governments in as many days.
