No group claimed responsibility for the attack at the upscale Abdullah restaurant, which was crowded with families celebrating the end of the four-day Islamic holiday of Eid al-Adha. The U.S. blamed the blast on al-Qaida, which uses suicide bombings as its signature attack.
Police Brig. Gen. Sarhad Qadir, who gave the casualty figures, said the dead included at least five women and three children.
About 120 people were wounded.
It appeared, however, that the target was a reconciliation meeting between Arab tribal leaders and officials of the Patriotic Union of Kurdistan, the Kurdish party of President Jalal Talabani, on ways to defuse tension among Arabs, Kurds and Turkomen in the Kirkuk area.
Kurds want to annex Kirkuk and surrounding Tamim province into their self-ruled region of northern Iraq. Most Turkomen and Arabs want the province to remain under central government control, fearing the Kurds would discriminate against them.
Iraq's parliament exempted the Kirkuk area from next month's provincial elections because the different ethnic groups could not agree on how to share power.
A guard at the entrance said the blast occurred moments after a man parked his car and walked inside. He was not searched because the guards had not been told to frisk customers, the guard said. He spoke on condition of anonymity because of fears for his own safety.
At the city's main hospital, family members wept and screamed in the blood-smeared corridors as doctors tried to save lives. Many victims were horrifically wounded, and mangled bodies lay unattended on the emergency room floor.
Salam Abdullah, a 45-year-old Kurd, said he was having lunch with his wife when they saw shrapnel flying through the room.
"I held my wife and led her outside the place. As we were leaving, I saw dead bodies soaked with blood and huge destruction," he said. Abdullah was wounded in his head and left hand; his wife suffered head and chest injuries.
"I do not know how a group like al-Qaida claiming to be Islamic plans to attack and kill people on sacred days like Eid," said Awad al-Jubouri, 53, one of the tribal leaders at the luncheon.
"We were only meeting to discuss our problems with the Kurds and trying to impose peace among Muslims in Kirkuk."
The attack was the deadliest in Iraq since June 7, when a car bomb killed 63 people in a Shiite neighborhood of Baghdad.
U.S. officials say attacks are down 80 percent nationwide since March, though major bombings still occur. A double truck bombing killed 17 people on Dec. 4 in the former Sunni insurgent stronghold of Fallujah west of Baghdad.
It was unclear what effect Thursday's attack would have on reconciliation efforts in Kirkuk, since the victims included both Arabs and Kurds. Mass attacks against civilians have prompted many Sunnis to turn against the insurgency.
But ethnic competition is intense in Kirkuk and elsewhere in the volatile north, the most ethnically mixed part of the country.
The U.N. mission, which has been trying to defuse tension in Kirkuk, urged community leaders "to demonstrate responsible leadership and to urge restraint by their followers at this difficult time."
In a joint statement, U.S. Ambassador Ryan Crocker and the top U.S. commander Gen. Ray Odierno condemned the bombing and accused al-Qaida of trying to "divide Iraqi communities" and halt the progress toward "a stable, inclusive and tolerant society."
U.S. commanders have long believed that resolving differences among the ethnic communities is the key to defeating the insurgents in the north because al-Qaida and the dozen other Sunni extremist groups there exploit those tensions.
But progress has been difficult because of deep-seated suspicions and conflicting claims on Kirkuk, the center of Iraq's vast northern oil fields which the Kurds have long wanted to bring into their autonomous region.
Kirkuk has been hit by at least 41 suicide attacks since May 2005, according to an Associated Press tally. The deadliest attack occurred July 17, 2007, when a suicide truck bomber struck a Kurdish political office, killing at least 80 and wounding more than 180.
Iraq's constitution provides for a referendum to be held in Kirkuk to determine whether it would be annexed to the Kurdish regional administration. But the vote has been repeatedly postponed because of fears that the balloting would worsen ethnic tension.
At the same time, relations between the Kurds and Prime Minister Nouri al-Maliki have worsened because of differences over control of oil resources, Kirkuk and power-sharing.
A draft law to regulate the oil industry has been stalled for nearly two years because the Kurds withdrew their support, maintaining it gave too much control to the national government.
The Kurds also want a bigger say in decision-making within the ruling coalition.
Al-Maliki has accused the Kurds of breaking the law by sending Kurdish troops outside the self-ruled region, ostensibly to protect Kurdish communities in central government territory.
