Iraqi security forces have discovered at least 30 bodies, all of them beheaded, near the town of Baquba.
Police say many of the victims had also been shot.
The bodies were found on the main street of Mulla Eed, a village plagued by sectarian violence between Shia and Sunni Muslims since the bombing of a Shia shrine in February.
The bombing of the shrine in Samarra last month sparked reprisals and pushed the country to the brink of civil war.
Meanwhile, 38 people have been killed in two raids mounted by US troops against Iraqi Shia forces.
