The blast occurred at 9:45 a.m. in the western district of Harithiya in Baghdad. Hospital officials said at least two people were killed and 23 wounded.
The attack occurred just minutes before leaders of Allawi's party were due to hold a news conference to disclose candidates for the January 30 election.
A senior government official said Allawi was not close to the scene when the attack occurred and that he was safe.
Iraqi insurgents have stepped up their attacks against politicians, US troops and Iraqi security guards in protest against the upcoming election.
