At least 34 other people were wounded in the attack in the centre of Musayyib, a town that lies about 60 kilometres south of the capital, a police officer and a medic at the local hospital said.
"A suicide bomber blew himself up in Musayyib market, causing 20 civilian martyrs," an interior ministry spokesman said.
A source at Musayyib hospital said at least four of the wounded were in very serious condition following the blast, which rocked the market at around 11:30 AM (0830 GMT).
Four civilians were wounded when a suicide bomber blew himself up at the entrance of the city's main bus station early today, police sources said.
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Both attacks were claimed by the Islamic State jihadist group through its propaganda agency Amaq, which in both cases spoke of a "martyrdom-seeking operation" using an explosive vest.
IS has carried out dozens of deadly suicide bombings targeting civilians but Iraq has been on heightened alert since the start of the holy Muslim fasting month of Ramadan.
It was during Ramadan last year that IS carried out its deadliest ever attack in the Iraqi capital with a truck bomb that set two shopping arcades ablaze, also in Karrada, resulting in more than 320 deaths.
The bombings in Baghdad come as Iraqi forces fight to retake the last IS-held areas of Mosul, a city that was the jihadist group's emblematic stronghold.
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