All 32 people killed by the suicide bomber were men, police and ambulance officials said.
It was the fourth major bombing to target Iraqi civilians or members of the predominantly Sunni tribal movement known as Awakening Councils in the past 10 days.
A suicide bomber targeting members of the US-funded movement killed 12 people on Monday in Tarmiya, just north of Baghdad.
On the political front, the Iraqi government took a small step towards national reconciliation by sending a draft amnesty bill to the parliament speaker.
The bill, drafted by the Shia-dominated government, falls far short of Sunni demands, however,
It covers less than a quarter of those held in Iraqi prisons, and none of those held by the American military.
Sunni parliamentarians have argued that most prisoners are charged with terrorist crimes, rendering it ineffective.
Some also fear referring the bill to parliament will actually delay prisoner releases.
Ali al-Dabbagh, the government's spokesman, said the draft bill would exclude those imprisoned for a variety of crimes ranging from terrorism, kidnapping and rape to antiquities smuggling, adultery and homosexuality.
It also excludes senior figures of the former Baath government.
If passed in its current form, the bill could see some 5,000 prisoners released, al-Dabbagh said. The Iraqi government has about 20,000 people in custody, while the US military holds about 25,000.
In other news, Iraqi media reported that a number of politicians would ask the parliament to strip Adnan al-Dulaimi, the head of the mainly Sunni Iraqi Concordance Front, parliamentary immunity.
A joint force of the Iraqi police and multinational forces recently found a cache of weapons in al-Dulaimi's house and investigations into the suspected elements involved in the operation, allegedly revealed the involvement of al-Dulaimi's son in the killings of civilians.
After the incident, Iraqi authorities transferred al-Dulaimi from his own house to the Rashid Hotel inside Baghdad's Green Zone to keep him under monitoring.
Al-Dulaimi's house was similarly raided last year and weapons were found inside it, but the matter was later settled after a meeting between him and US officials.