Khalid al-Daami, Karbala's security chief said: "The explosion was a huge one. It took place in a crowded area."
Shortly before the 09:15 local time (06:15 BST) attack in Karbala, which lies 70 miles south-west of Baghdad, a separate attack in the Iraqi capital saw at least ten people killed when a car bomber targeted a checkpoint at the Jadriyah bridge.
Two days ago, a suicide bombing collapsed the al-Sarafiyah bridge, another river Tigris crossing, leaving 11 people dead.
Today's attack at Karbala took place about 200m from the shrine to Imam Hussein, the grandson of Muhammad and an important spiritual figure for Shia Muslims.
Last month's annual pilgrimage to the shrine saw more than a 100 Shia Muslims killed in sectarian attacks as they journeyed from around Iraq.
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