The latest ban is aimed at averting attacks on Shia pilgrims heading to Karbala - 110km south of Baghdad - to celebrate Tuesday's anniversary of the birth of Mohammed al-Mahdi, the 12th Imam of Shia Islam.
Rahman Mshawi, a Karbala police spokesman, said around two million Shia pilgrims were expected to descend upon the city.
Mshawi said police had set up extra checkpoints on the western side of Baghdad, which borders the mainly Sunni province of Anbar, where al-Qaeda fighters are prevalent.
Earlier in the day, a car bomb exploded near Baghdad's most important Shia shrine, killing seven people and wounding dozens.
The blast occurred around noon in the busy Oruba Square, a major commercial area in the Kadhimiya district.
The explosion was about 500 metres from the twin-domed shrine of Imam Musa Kadhim, an 8th century Shia religious leader who is buried there.
An official at the neighbourhood hospital said seven people were killed and 30 wounded, including two children.
In other news, a US commander said on Saturday that his forces were working to root out al-Qaeda fighters north of Baghdad.
Colonel David Sutherland said fighters from the Brigades of the 1920 Revolution, an armed Sunni Arab group, acted as scouts and informants for US and Iraqi forces during a recent operation to secure an area around Baquba, capital of Diyala province.
"We call them concerned local nationals. These are people, patriots that have come forward and joined the security process"Colonel David Sutherland, US military commander
"We call them concerned local nationals. These are people, patriots that have come forward and joined the security process," he said via video link from Diyala.
"They are working with my soldiers, they are working with Iraqi security forces to assist us with information with being the eyes and ears."
The 1920 Brigades, who took their name from the date of an Iraqi uprising against British rule, were founded to fight US forces in the wake of the March 2003 invasion, which overthrew Saddam Hussein, the Iraqi president.
The group's fighters are mainly Sunni Arabs and include many former members of Saddam's army, and have claimed responsibility for bomb attacks on US troops, but said it was not involved in attacks on Iraqi civilians.
In recent months there have been several reports from Baghdad and from Anbar that the 1920 Brigades are now increasingly working alongside their former enemy to defeat al-Qaeda's Iraqi network.
However, Al Jazeera reported on Saturday that the 1920 Brigades had, in a statement, denied that it was taking part in battles against al-Qaeda in Iraq on the side of US and Iraqi forces in Diyala.
The group said it had no branch in the province.
The statement further said that a faction by the same name had seceded and formed a new group under the "Hamas of Iraq" label to demonstrate its stand vis-a-vis the ongoing developments in Diyala, Al Jazeera reported.