The BBC reported that most of the victims were women queuing for cooking fuel to use during Ramadan.
At least another 37 people were injured in the blast.
No-one has claimed responsibility. The area has seen a number of violent sectarian attacks between Shia and Sunni muslims.
In a separate incident, the severed heads of nine murdered Iraqi police and soldiers have been found in the city of Tikrit.
It's believed the police and soldiers had been abducted by insurgents.
A Danish soldier was killed and eight were injured in a roadside bomb attack near the southern city of Basra.
US officials are predicting a spike in violence during Ramadan, following the trend of recent years.