The bomber struck in the Khales area northeast of Baghdad, killing five people and wounding 10, a police colonel and a doctor said.
The colonel said one of the dead was a policeman who had been guarding the pilgrims. He threw his arms around the bomber just before the attack in a bid to shield others.
The policeman was Ayyub Khalaf, 34, who was married and had two children, his friend Saad Naim told AFP.
"We will take revenge on the Al-Qaeda terrorist organisation," he added.
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The Khales bombing was the latest in a wave of attacks targeting Shiite pilgrims, including two in Baghdad province that killed at least eight pilgrims on Tuesday, and two car bombings that took the lives of at least 24 dead on Monday.
Hundreds of thousands of people, many of them on foot, make pilgrimages to the holy city of Karbala during the 40 days after the annual commemoration marking the death of the Prophet Mohammed's grandson, known to Shiites as Imam Hussein.
Sunni militants, including those linked to Al-Qaeda, frequently target members of Iraq's Shiite majority, whom they consider to be apostates.
Also, a roadside bomb in the northern city of Mosul today killed two people and wounded two others, and gunmen killed two soldiers and wounded two in an attack on a checkpoint, officials said.
Violence has reached a level this year not seen since 2008, when Iraq was just emerging from a period of brutal sectarian killings.
More people were killed in the first eight days of this month than in all of December last year.