Violent clashes broken out in the two cities at around mid-day on Friday between members of the Soldiers of Heaven cult and Iraq's security forces, police said.
Policemen and women were among those killed or wounded in Nasiriya, about 350km south of the capital Baghdad, according to the director-general of health, Hadi al-Ramahi.
|Bodies of Shia fighters lay|
in the streets in Basra [AFP]
In Basra, Major Abdul Jalil Khalaf, the police chief, said fighting took place in three-quarters of the city between the security forces and members of the Soldiers of Heaven.
Police said men attacked the police headquarters in al-Tamimiya neighbourhood as clashes spread to a number of districts in Basra's city centre.
An indefinite curfew was immediately placed on the city by Iraqi authorities.
Friday's fighting came as Shias across Iraq marked Ashura, one of the holiest days in Shia Islam, when they commemorate the killing of Imam Hussein by armies of Yazid in 680.
Basra's police chief said the fighting by the Soldiers of Heaven was being led by Ahmed al-Hassani Al-Yamani.
Yamani claims to be an ambassador of Imam Mahdi, an eighth century imam who vanished as a boy and whom Shias believe will return to bring justice to the world.
During Ashura in 2007, the Soldiers of Heaven clashed with US and Iraqi forces outside the holy cities of Najaf and Karbala.
Last year's fighting left 263 members of the sect dead, including their leader, Dhia Abdul Zahra Kadhim al-Krimawi, also known as Abu Kamar.
Hundreds of thousands of people crowded the streets of Karbala for the ceremonies on Friday, which reach their peak on Saturday.
The shrine city, around 110km south of Baghdad, was under a tight security cordon, with around 20,000 security force members deployed.
Ashura ceremonies have been targeted by Sunni groups in the past and on Thursday eight people were killed when a suicide bomber blew himself up during a procession outside a mosque in Baquba, 60km north of Baghdad.
British forces handed over control of the oil-rich province of Basra to Iraqi forces in mid-December, amid warnings that it could descend into violent turf wars between Shia groups.