An onslaught on a convoy transferring inmates north of Baghdad left dozens dead Thursday, as visiting UN chief Ban Ki-moon said Iraq's survival hinged on a more inclusive government.

Most of the 60 killed in the spectacular pre-dawn ambush were prisoners convicted of terrorism charges being transferred from Taji prison, barely 25 kilometres (15 miles) north of the capital.

Explosions from the attack were heard in some neighbourhoods of Baghdad, where UN chief Ban Ki-moon landed Thursday on an unscheduled stop in his Middle East tour.

"At least 60 people, prisoners and policemen, were killed in a suicide attack followed by several IEDs (improvised explosive devices) and shooting," an interior ministry official told AFP.

One security source said the inmates were being transferred as a precautionary measure after Taji prison was hit by mortar fire on Wednesday.

The exact circumstances of Thursday's attack were not immediately clear, nor how many attackers were dead or how the prisoners they were apparently trying to free were killed.

The bus was believed to be transporting around 60 prisoners, and medics said 54 of those killed in the attack were inmates.

Most of the bodies were burnt beyond recognition, they said.

Government forces were recently accused by rights watchdogs of having executed more than 250 prisoners since June 9.

Among the allegations are that members of the Iraqi security forces shot prisoners, on the grounds they were sympathetic to advancing forces from the Islamic State (IS) jihadist group, that jails were set on fire and that grenades were tossed into cells.

- Sectarian tension -

Since it launched a sweeping offensive on June 9, IS and allied Sunni groups have conquered the country's second city Mosul, overrun large swathes of five provinces and declared a "caliphate" straddling Iraq and Syria.

The onslaught has fanned the flames of sectarian tension between Iraq's Shiite majority and Sunni minority that had already claimed thousands of lives this year alone.

Prime Minister Nuri al-Maliki's alliance comfortably won elections in April but he has faced mounting domestic and foreign pressure to step aside since the flare-up.

The Shiite premier has accused the Sunni mainstream of condoning the IS offensive and "dancing in the blood" of the onslaught's victims.

But many retort it was Maliki's own brand of sectarian politics that brought the country to the brink of collapse.

"Iraq is facing an existential threat but it can be overcome by the formation of a thoroughly inclusive government," Ban said at a joint news conference with Maliki.

"It is critical that all political leaders fulfil their responsibilities to ensure that the government formation process falls within the constitutional timetable," he said.

The UN chief highlighted the plight of the 600,000 Iraqis displaced over the past few weeks and encouraged the country's fractious politicians to speed up the government formation process.

- Presidential vote -

For weeks, bickering factions appeared to turn a deaf ear to repeated pleas from the UN and the powerful Shiite clergy to iron out their differences and agree on a consensus government.

Earlier on Thursday, however, in a late-night meeting held behind closed doors, the main Kurdish parties agreed on a common candidate for president.

"Fuad Masum is the only candidate of the Kurdish blocs for the position of president," a senior Kurdish official who witnessed the vote told AFP.

An unofficial power-sharing deal reached in the aftermath of the 2003 US-led invasion reserves the presidency for a Kurd, meaning Masum is almost guaranteed to become the next head of state.

A parliament session scheduled for later Thursday could confirm him as president, a move that would pave the way for a deal on the much more powerful post of prime minister.

Despite the billions of dollars spent on training and equipment by the United States during its eight-year occupation, Iraq's million-strong army completely folded when insurgents attacked last month.

Maliki has called on the US for help, but Washington is reluctant to boost military aid while Iraq's political leadership remains divided.

He is instead increasingly turning to Russia, where Defence Minister Saadun al-Dulaimi was meeting officials to seek "weapons, equipment and modern military aircraft",

The sectarian flare-up tearing Iraq's social fabric was also beginning to take a heavy economic toll.

Official figures released Thursday show that oil exports dropped from 2.58 million barrels per day to 2.42 million from May to June.

Baghdad's inability to export via a pipeline to Turkey and by road to Jordan means the figures also fall far short of a budgeted projection of 3.4 million bpd, stripping the government of billion of dollars in revenue.