Around a dozen mortar rounds have exploded in Kerbala, a city in southern Iraq, as thousands of Shia gathered to begin their annual religious festival of Ashura.
Early reports said that the rounds landed harmlessly near the governor's office on Saturday evening.
Earlier a police officer said it was feared there were casualties but said that details were unclear.
The site had been sealed off, witnesses said, and pilgrims told to keep away from the area.
Ashura lasts for 10 days and is the highpoint of the Shia Muslim religious year.
The religious ceremonies of Iraq's Shia Muslims - who make up 60 per cent of the country's population - have frequently been attacked during the war in Iraq.
Many of the attacks are believed to have been carried out by Sunni Muslims - some of whom regard the Shia as heretics.
US helicopter crashes
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| Iraqi insurgents have shot down several US helicopters since 2003 [Reuters] |
A US military helicopter went down northeast of Baghdad on Saturday, killing all 13 people aboard, the military said in a statement.
"A US forces helicopter went down northeast of Baghdad this afternoon. Emergency Coalition Forces responded and secured the scene," the statment said.
"Thirteen passengers and crewmembers were aboard the aircraft and all were killed.
The military did not say what had caused the aircraft to crash.
It can take several days for military to say if the crash was caused by hostile fire or if it was the result of an accident or mechanical malfunction.