The first car bomb destroyed the blast wall that surrounds the Palestine. Several minutes later, another car bomb exploded outside a government ministry on the other side of the square (which drew away the security forces). Once the recovery effort was fully underway, a third vehicle (a cement mixer packed with explosives) drove through the breach in the wall and detonated just outside the Palestine hotel.
The entire event was staged for the benefit for the western reporters who have become virtual prisoners of their hotel rooms in Baghdad (since they couldn't go to the war, the guerrillas brought the war to them). The incident was in clear view of the AP's mounted video camera (which recorded the entire event) -- footage that will be replayed in endless loops in newsrooms across the globe. Also, the third bomb in the cement mixer may have been targeted at reporters who went to their windows to investigate (courtesy, Chris Allbritton, Time's correspondent in Baghdad).The effect desired from this highly orchestrated event (which is synergistically much more potent than a single event due to FVM) was to radically magnify the menace, uncertainty, and mistrust (all of which are aspects of moral conflict) of those in the media. It was also intended to bring those same feelings, by extension, to the public the reporters represent. It is yet another example of tactical innovation by Iraq's open source insurgency (which unfortunately for us has been happening with increasingly frequency lately). This attack will set the expectations of the media -- re: this conflict -- for months.
UPDATE: The attack was claimed by an group affiliated with al Qaeda (Lions of Braa Bin Malik). Again, the decentralized community structure of the OSW plays a part in rate of innovation.