A witness said the attack was timed for early evening when mourners arrived for food provided by the family of the deceased.
Bombings and shootings throughout Iraq on Monday killed about 70 other people.
The loud explosions that rocked central Baghdad were thought to be from rockets fired from the eastern part of the capital towards the Green Zone.
The US military said it had no immediate information about damage or casualties.
A security breach was reported by the US defence department which said its soldiers seized identity cards for access to the Green Zone and the US embassy from fighters in recent gun battles in the capital.
Colonel Steven Townsend, commander of the 3rd Stryker Brigade, said the documents were seized in a Sunni stronghold west of the Green Zone, which has repeatedly been targeted by bomb attacks in recent weeks.
|April has been the deadliest month for US |
trooops this year, with 104 killed. [AFP]
Elsewhere in the capital, a bomber blew up a vehicle outside a police headquarters, killing five people and wounding 12, a security official said.
A former brigadier-general in Saddam Hussein's army was shot dead in the Dura neighbourhood.
And three civilians were killed and 10 wounded in two separate roadside bombings.
In Mosul, the authorities arrested 61 suspected fighters following an overnight shootout at a police station.
In other parts of the country 77 more people were arrested. Deadliest month April has also been the deadliest month for the US so far this year with 104 deaths among its troops.
George Bush, the US president, has committed another 30,000 troops to the security operation in Baghdad but is facing legislation by the Democratic-led congress calling for troop withdrawal by October 1. Bush has promised to veto the measure.
Tariq al-Hashemi, Iraq's vice-president, raised the threat by Sunni ministers to leave the Shia-dominated government in a telephone discussion with Bush over the weekend, al-Hashemi's office said on Monday.
The White House said Bush called al-Hashemi on Sunday to discuss "the current situation in Iraq" and "the importance of additional steps in the reconciliation process".