* Violence is at worst level in at least five years
* Al Qaeda-linked insurgents have increased attacks
* Bombings target capital almost daily
By Kareem Raheem
BAGHDAD, Dec 8 (Reuters) - Car bombs killed at least 39 people across Iraq on Sunday and wounded more than 120, mainly targeting busy commercial streets in and around the capital, police sources said.
The deadliest attack took place in the predominantly Shi'ite Muslim district of Bayaa in Baghdad, when a bomb in a parked vehicle exploded near car workshops, killing seven and wounding 14, the sources said.
An attack on another car workshop in the Sunni district of Taji, 20 km (12 miles) north of Baghdad, killed three and wounded 10 after nightfall.
Violence in Iraq is at the highest level in at least five years and the capital has been targeted almost daily. More than 8,000 have been killed this year, the United Nations says.
Sunni insurgents, mostly with links to al Qaeda, have claimed several large bombings. The last large set of blasts was on Nov. 21, north of the capital. Since then, there has been a steady flow of smaller attacks, mainly targeting Shi'ite communities but also some Sunnis.
No group immediately claimed responsibility for Sunday's bombings but al Qaeda has increased its grip on parts of the country since the escalation of the crisis in neighbouring Syria and the withdrawal of U.S. troops from Iraq in 2011.
At least 123 people were wounded in Sunday's attacks. In one, a car bomb exploded in a busy square in central Baghdad, killing at least five people and wounding 15, police said.
In Radhwaniya, a predominantly Sunni area in the capital, a roadside bomb killed two people and wounded eight, police said.
There were other attacks in Baghdad's mainly Shi'ite districts of Amel, Ghadir, Sadr City, Ameen and Hussainiya.
In Baquba, 65 km northeast of Baghdad, a bomb in a parked car blew up inside a market killing two people and wounding seven, police said. (Reporting by Kareem Raheem; Writing by Sylvia Westall; Editing by Mark Trevelyan)