The bomb struck pilgrims who were leaving the holy shrine city of Karbala, 110 kilometres south of Baghdad, where more than a million devotees had gathered to mark the festival of Arbaeen.
It was the third major attack this week on worshippers who have for weeks been travelling there on foot for the climax of the event earlier on Friday.
A provincial health ministry official gave the death toll and said 150 others were wounded.
"A mortar round was launched from fields northeast of the city," provincial governor Amalheddin al-Hir said.
"I accuse Al-Qaeda who are being supported by the Baath party," he said, referring to Saddam's outlawed political movement.
Arbaeen marks 40 days after the Ashura anniversary commemorating the slaying of Imam Hussein, one of Shiite Islam's most revered figures, by the armies of the Sunni caliph Yazid in 680 AD.
A series of suicide attacks have seen dozens of pilgrims killed in recent days. Earlier, Hir said 10 million worshippers had visited the Imam Hussein shrine in the past two weeks, walking as a sign of piety, with the ceremonies culminating at midday (0900 GMT) today.
Published 05 February 2010, 12:00 IST