Business minister Mandelson in Iraq - AFP

Business minister Peter Mandelson arrived in Baghdad on Monday to lead the country's first official trade delegation to Iraq for more than 20 years.

The move is a further sign of London's desire to normalise relations with Baghdad as Britain pulls its troops out of southern Iraq over the coming months, six years after the US-led invasion that ousted Saddam Hussein.

Mandelson's visit came as series of rush-hour car bombings hit Baghdad, killing at least 18 people and wounded 58 others, according to law enforcement officials.

"Lord Mandelson, the business secretary will lead a high-level business delegation on a one-day visit to the country," the embassy official said.

"The delegation, comprising 23 companies, will take the opportunity to visit both Baghdad and Basra."

Ministers have talked up business opportunities in Iraq, particularly in the southern port city of Basra where Britain's forces and reconstruction efforts are based.

"This is the first such British delegation to visit Iraq in over 20 years," the official said.

"Lord Mandelson and the representatives will have the opportunity to meet with Iraq government ministers, including Prime Minister Nuri al-Maliki, to contribute to the economic reconstruction of the country."

Department for Business, Enterprise and Regulatory Reform said Mandelson and the business delegation would also visit Kuwait and the United Arab Emirates.

The companies in the delegation comprise "a broad range of sectors," said BERR.

"Not just oil and gas but also in healthcare, construction, transport, power, water, banking and the security sector. The UK government's future relationship with Iraq will be one of partnership," it added.

British forces officially started to withdraw from Iraq six days ago, signalling the end of military operations that began with the invasion that toppled Saddam.

Operations will end by May 31 and all but a few hundred of the 4,100 British service personnel are to leave the violence-wracked country by July 31.

A Royal Navy training team is expected to stay on in Iraq to provide naval training in the southern port of Umm Qasr.

Security has improved dramatically since 2007, when Iraqi and US forces launched offensives against Al-Qaeda militants with the help of local US-financed and trained militias.

But the latest attacks follow others in March that saw 252 Iraqis killed.

The death toll remained high last month due to four major suicide bombings, including a March 8 attack in Baghdad when an assailant on a bicycle blew himself up killing at least 28 people outside a police academy.