The bus was carrying female college students to school in the mostly Sunni Yarmouk area when gunmen opened fire, police said. One of the students was wounded, they said.
Meanwhile, clashes raged in southern Baghdad's Saydiyah neighborhood, and three Iraqi soldiers were wounded there, police said.
The fighting began when Iraqi troops approached a house where militants were believed to be hiding. The suspects tossed hand grenades out from the windows, toward the soldiers outside. Gunfire erupted, and the militants fled the house after about 30 minutes, police said.
Police had no information about insurgent casualties, but said the men were believed to have escaped.