The attack targeted a commercial area in Baghdad's southwestern Amil neighborhood, police and hospital officials said. They spoke on condition of anonymity because they were not authorized to release information.
No one claimed responsibility for the attack, but the Islamic State group has been behind previous Baghdad bombings. Iraqi forces have been battling the extremists in Mosul, the country's second largest city, since October.
Iraq declared eastern Mosul "fully liberated" in January and is now fighting for the more densely populated western half.
The militants have suffered a string of defeats over the past two years, but have continued to regularly launch attacks in and around Baghdad. A series of large-scale bombings claimed by IS have struck Baghdad since the operation to retake Mosul began.
Iraqi and coalition officials have repeatedly warned that IS will return to its insurgent roots as it loses territory.
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