The bomber targeted a tent in the Iskan area of western Baghdad where Shiites were distributing food and drinks to pilgrims making their way to the shrine city of Karbala, south of the capital.
The attack also wounded at least 16 people, officials said.
IS issued a statement claiming the attack in which it boasted that the bomber had successfully passed security checkpoints to carry the attack.
The Sunni extremist group considers Shiites to be heretics and frequently targets them with bombings in Baghdad.
But even their ouster from the northern city of Mosul is unlikely to bring an end to IS bombings, and the jihadists may increasingly turn to such attacks as they continue to lose ground.
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