Two soldiers killed as blast wrecks building
Five soldiers were also wounded, and a cheering mob of Iraqis looted their wrecked Humvees, taking away weapons and equipment.
Brigadier General Mark Kimmitt did not say what sort of chemical munitions were believed to be produced at the site. After the blast, there was no sign in the area of precautions against chemicals.
"Chemical munitions could mean any number of things," including smoke grenades, he said.
Asked about reports that the raid team included members of the Iraq Survey Group the US team searching for weapons of mass destruction in the country - he said: "The inspection was by a number of coalition forces."
He said the owner of the site was "suspected of producing and supplying chemical agents" to Iraqi insurgents, but did not elaborate.
The deaths of the two soldiers in Baghdad and a marine in Fallujah brought to 114 the number of US troops killed in combat this month nearly as many as the 115 Americans who were killed during the two-month invasion that toppled Saddam Hussein a year ago.
The Baghdad explosion occurred when US troops broke into a building in the northern Waziriya district.
Moments later, the blast went off, levelling the front half of the single storey building and setting ablaze four Humvee 4X4s parked outside.
Two soldiers were killed and five wounded.
Brigadier General Kimmitt said the cause of the blast was being investigated, but said: "it had quite an amount of explosives there."
An American soldier was seen being taken away on a stretcher, her chest and face severely burned. Witnesses reported other US casualties being rushed away in ambulances as other troops closed off the area.
Several Iraqis were pulled out of the wreckage, including a woman. Afterward, dozens of cheering teenagers started to smash the abandoned Humvees.
One child climbed on the bonnet of one of the vehicles and beat it with a stick.
Iraqis stripped the vehicles of equipment, one carrying a heavy machine gun, another waving a US helmet.
"This is for the madman Bush, for the madman Bremer," said one youth waving a rifle.
Some residents said the building held a perfume factory, while others said it had once been a scrap metal workshop that repaired weapons and recycled old ammunition.