The brazen assault on the offices of the transport ministry along Canal Street in the northeast of the capital comes as security forces grapple with intensifying violence and an extended standoff with anti-government fighters in western Anbar province.
Washington has provided Baghdad with additional weaponry to help it combat militants and plans to sell Iraq 24 Apache attack helicopters as well, but diplomats and analysts say the Shiite-led government must do more to reach out to the disaffected Sunni community in order to undercut support for militancy.
It was not immediately clear if any casualties had resulted from the militant attack.
"A terrorist group infiltrated the company, which is next to our building," said Kamal Amin, spokesman for the human rights ministry, which has offices next door.
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"For the safety of our employees, we have taken all necessary security measures and we have evacuated our building."
Security forces sealed off the surrounding area, which is home to other government offices, including the headquarters of the transport ministry and a human rights ministry building.
They struck just hours after several car bombs ripped through Baghdad Jadidah, Shuala and Talbiyah, all of which are predominantly Shiite, leaving nine people dead yesterday.
Attacks yesterday also hit the outskirts of the capital, as well as the northern cities of Mosul and Tuz Khurmatu, killing seven others.
At least 909 people have been killed so far this month as a result of violence in Iraq, more than three times the toll for January 2013, according to an AFP tally based on reports from security and medical officials.