The streets were packed at the time of the blasts with vendors selling goods on sidewalks and residents shopping at the start of the weekend.
Iraqi and US officials said a roadside bomb exploded first. Minutes later, as Iraqi security forces and locals rushed in to help the injure, a second, larger blast occured.
Women and children were among the casualties.
Police and the US military said they believed the second explosion was caused by a suicide bomber.
Last month, two women killed 99 people when they detonated explosives in packed animal markets, with 62 dying in the deadlier of the two bombings.
Another suicide bomber blew himself up near a police station in northern Iraq on Friday and killed four policemen.
The bomber attacked the Al-Waqhas police station in the Ras al-Jadha neighbourhood of Mosul at around 7am (04:00 GMT), police officials said.
Four policemen were killed and 17 others, including 15 policemen, were wounded in the attack that once again highlighted the danger Iraqi security forces face.
"We have received bodies of four policemen killed," doctor Ghanim Ahmed at the Mosul general hospital said.
Another medic there confirmed admitting 15 wounded policemen.
A police officer said the targeted neighbourhood housed several government offices, including one belonging to the interior ministry.