Iraq sealed its borders last night and braced for a deadly onslaught of sectarian retaliation after Sunni extremists murdered at least 160 people in coordinated car bombings and mortar attacks in Baghdad.

The assault on the capital’s Shiite stronghold of Sadr City, which also injured more than 250 people, was the deadliest insurgent attack to be unleashed in the city since the fall of Saddam Hussein in May 2003.

The government imposed an indefinite curfew in Baghdad and shut the country’s main airports and ports.

Leaders from all main communities, including Prime minister al-Maliki, who is a Shiite, made a televised appeal for calm, a step last taken in February after the bombing of a major Shiite shrine blamed on Al Qaeda.

“We call for people to act responsibly and to stand together to calm the situation,” a joint statement read.

Witnesses said the vast coordinated attacks on the Shiite district had leveled entire streets. Police said at least six car bombs, each packed with up to half a ton of explosives, were set off at short intervals in the afternoon, killing shoppers at crowded market places.

“Many of the dead have been reduced to scattered body parts and are not counted yet,” the health minister, Ali al-Shemari, said.

The attack came as the U.S. Army secretary, Francis Harvey, arrived in Baghdad to celebrate the Thanksgiving holiday with American troops stationed in Iraq.

But there was little to celebrate for President Bush, who is under intense pressure at home to find a way out of the quagmire in Iraq and bring America’s forces home.

The wave of killing began when about three dozen gunmen launched a brazen assault on the Shiite-run Health Ministry, staffed by 2,000 employees. They fired grenades and mortars into the ministry compound before being driven off by the arrival of American fighter helicopters.

In an apparent response, Shiites then fired a volley of mortars at a Sunni district of Baghdad. But the carnage had only just begun. As Health Ministry employees began to escape their besieged compound at about 3 p.m., the first of the huge car bombs went off in Sadr City.

After the full scale of the destruction became apparent, Shiites began to avenge themselves by firing another barrage of mortars at a Sunni area.

Sectarian violence in Baghdad long ago reached the stage where families fled mixed neighborhoods to form homogenous Sunni and Shiite districts. But now the fighting between the two communities is now so open that mortar shells routinely fly between those distinct areas, marking out the battlegrounds of a city at war with itself.

Britain’s Foreign Secretary, Margaret Beckett, said she was saddened to hear of “further barbaric acts of terrorism” in the Iraqi capital.

“Such attacks only serve to show how little the terrorists have to offer the Iraqi people and the importance of building national reconciliation,” she said.