The bombing is the deadliest since Shia pilgrims were attacked in Baghdad last month.
US marine deaths
Elsewhere, the US military says two US marines have died in a non-combat incident west of Baghdad.
A statement issued on Friday said the Multinational Force - West marines died on Thursday near the Anbar province city of Karmah.
It says the incident is under investigation.
The deaths raise to at least 4,136 members of the USmilitary who have died in the Iraq war since it began in March 2003, according to an Associated Press count.
It shows at least nine American troop deaths so far this month - seven of which are non-combat-related.
July saw the lowest US death toll since the war started with 11 deaths.