The attack dealt a major blow to US efforts to stabilise Iraq ahead of a hand-over of sovereignty on June 30.
Abdel-Zahraa Othman, also known as Izzadine Saleem, was the second and highest-ranking member of the US appointed council to be killed. He was among nine Iraqis, including the bomber, who died in the bombing, Iraqi officials said.
A suicide bomber was responsible, the military said.
A previously unknown group, the Arab Resistance Movement, claimed responsibility, saying in a website posting that two of its fighters carried out the operation against “the traitor and mercenary” Saleem.
The car bomb had the “classic” hallmarks of terrorist Abu Musab al-Zarqawi, US military spokesman Brigadier General Mark Kimmitt said.
Al-Zarqawi, a Jordanian-born militant with links to al-Qaida, is believed responsible for many of the vehicle bombs in recent months and for the death of American Nicholas Berg, whose decapitation was videotaped and posted on the internet last week.
Paul Bremer, the US administrator of Iraq, called Saleem’s killing a “shocking and tragic loss”.
“The terrorists who are seeking to destroy Iraq have struck a cruel blow with this vile act today,” he said. “But they will be defeated. The Iraqi people will ensure that his vision of a democratic, free and prosperous Iraq will become a reality.”
The council president’s position rotates monthly. Saleem’s death occurred about six weeks before the US plans to transfer power to Iraqis and underscores the risks facing those perceived as owing their positions to the Americans.
British Foreign Secretary Jack Straw said Saleem’s death should not deter the transfer of power.
“What this shows is that the terrorists and insurgents in Iraq are trying to disrupt the peaceful transfer of power from the occupiers to the Iraqi people, and these terrorists are enemies of the Iraqi people themselves,” he said in Brussels.
Saleem, the name he went by most frequently, was a Shi’ite who led the Islamic Dawa Movement in the southern city of Basra. He was a writer, philosopher and political activist, and edited several newspapers and magazines.
One Governing Council member said the bombing appeared to be an effort to foment sectarian divisions in Iraq and disrupt the transfer of political power.
The council selected Ghazi Mashal Ajil al-Yawer, a Sunni Muslim civil engineer from the northern city of Mosul, to replace Saleem. Al-Yawer will lead the council until June 30.
Al-Yawer said the council would continue “the march toward building a democratic, federal, plural and unified Iraq”.
Council member Ahmad Chalabi said terrorists are using the insurgent Sunni stronghold of Fallujah, where US Marines stopped patrols last month and allowed an Iraqi security force to oversee security, to prepare car bombs like the one that killed Saleem.
The victims included five people in Saleem’s entourage and two members of the Iraqi security forces. Fourteen Iraqis and an Egyptian were injured.
Two American soldiers also were slightly injured in the bombing near the coalition headquarters.
Saleem was in a convoy of five vehicles, and the car carrying the bomb was adjacent to the council chief’s car when it exploded, said witness Mohammed Laith.
Meanwhile, fighting persisted in the Shi’ite heartland in southern Iraq, where US jets bombed militia positions in the city of Nasiriyah after fighters loyal to radical cleric Muqtada al-Sadr drove Italian forces from a base there on Sunday.