The explosion took place at about 19:00 local time in a crowded area. Karbala was hit earlier this month by a suicide attack.
Another incident in the country involved a suicide truck attacking the home of a city police chief in the Sunni province of Anbar, killing nine Iraqi security forces and a further six civilians, according to the US military.
Violence has continued unabated since the US troop surge triggered a security crackdown in Baghdad.
On April 19th, nearly 200 people were killed in the capital after a spate of bombings, marking the bloodiest day in Iraq since the heightened security presence.
Al-Qaida militants are often blamed for attacks towards Shia communities and there are increasing concerns of worsening sectarian violence. Karbala is located about 100 kilometres south-west of Baghdad
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