Ministry officials told Reuters they expected the death toll to rise, as bodies were still being carried into the hospitals.
U.S. Army Lt. Col. Bill Salter said between 10 and 15 people had been killed in an attack, which he said was probably the work of a suicide bomber.
"We believe it was possibly a fuel-truck type vehicle," Salter told reporters at the scene of the blast. Witnesses said they saw a tanker speeding toward the police station moments before the powerful blast.
Insurgents have accused members of the new Iraqi government and police of cooperating with the U.S. military, a charge one National Guardsman rejected angrily.
"They say we collaborate with the coalition. We don't collaborate, we just protect our nation. We protect the land of Iraqis," National Guardsman Amer Shaker Mehdi told Reuters at the scene of the bombing.
After the bombing, protesters gathered and chanted, "Long live Saddam!" before police came in and dispersed the crowd by firing warning shots into the air, the Associated Press reported.
The attack was the latest in a spate of bombings and assassinations over the past week targeting Iraqi police, National Guard and senior Iraq government officials.
The Iraqi Defense Ministry said militants killed Essam al-Dijaili, head of the military's supply department, and his bodyguard in a drive-by shooting outside his Baghdad home Sunday night. Al-Dijaili's assassination comes one day after Iraq's justice minister survived an attack, which killed five of his bodyguards and last week's murder of a provincial governor.
The latest attacks came as the Philippines completed its troop pullout from Iraq a month ahead of schedule in an attempt to satisfy demands by insurgents who threatened to murder a Filipino truck driver hostage unless his country withdrew its troops by July 20.
Washington and Iraq's interim government have criticized the move, saying it would encourage more kidnappings.
Over the weekend, Iraqi interim Prime Minister Iyad Allawi authorized a U.S. air strike in the town of Fallujah, a focal point of resistance to the U.S.-led occupation.
The bombings, which began early Sunday, targeted purported trenches and fighting positions used by loyalists of Abu Musab al-Zarqawi, the Jordanian militant linked to al-Qaida and blamed for masterminding car bombings and other attacks in Iraq, Iraqi officials told the Associated Press.
But, Fallujah Mayor Mahmoud Ibrahim al-Jirisi said the attack hit a site for civilians supporting the Fallujah Brigade, a militia of local residents that took responsibility to secure the city after the U.S. Marines left.
"There are no Arabs or foreigners with them," al-Jirisi told Al-Jazeera.
The attack, the sixth U.S. strike on the city in roughly a month, killed 14 people and injured three, according to Saad al-Amili, a Health Ministry official.
Meanwhile, Allawi issued a decree Sunday to reopen an influential newspaper allied with radical Shiite cleric Muqtada al-Sadr. The closure of the paper by American forces in March helped spark months of fighting between U.S. forces and fighters loyal al-Sadr.
The weekly Al-Hawza regularly published Sadr's fiery sermons on its front page along with articles sharply critical of the U.S.-led occupation.
Allawi ordered the paper reopened in an effort to show his "absolute belief in the freedom of the press," his office said in a statement. Allawi's decision effectively reverses the order by the former U.S.-led occupation.