At least 42 people have been killed by roving bands of masked gunmen who appeared to be targeting Sunnis in the Baghdad neighborhood of Jihad.

A security source said the gunmen were wearing civilian clothes but were masked.

Witnesses said black-clad gunmen they described as Shiite militiamen set up at least two checkpoints Sunday and began stopping vehicles, forcing people out of their cars and shooting them.

"They also went into certain Sunni houses and killed everyone inside," said one witness who declined to be named.

The killings ended when US and Iraqi forces surrounded the area and began a search for the gunmen.

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A doctor cares for a young boy wounded in the Jihad area of western Baghdad, Iraq. (AP)