Another 52 people were wounded in the bombing in Muqdadiyah, about 90 kilometres north of the capital, according to security and hospital officials.
The dead included a local commander in Asaib Ahl al-Haq, a powerful Shiite militia that is part of the state-sanctioned Popular Mobilisation Forces, responsible for much of the security in the area.
The Islamic State group bombed a cafe frequented by militiamen in Muqdadiyah in January, killing at least 32 people and triggering a wave of revenge attacks on Sunni mosques and civilians.
No one immediately claimed today's attack, which came a day after a double bombing in Baghdad claimed by the IS group killed 73 people.
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The initial blast ripped through a crowded market in the Shiite district of Sadr City. A suicide bomber then targeted the crowd that gathered to help the victims. 112 people remain hospitalised, two police officials said.
All officials spoke on condition of anonymity because they were not authorized to talk to the media.
Yesterday's bombings marked the deadliest single attack in the Iraqi capital in months, fueling fears that the IS group is resorting to mass attacks on civilians as it suffers battlefield setbacks.