A car bomb ripped through a bustling commercial area of central Baghdad overnight, killing at least 12 civilians, Iraqi officials said on Tuesday.
Shortly after the attack, the Islamic State group claimed responsibility for the bombing in a statement posted online.
The explosives-laden pick-up truck was left in a parking lot in the Shi'ite-dominated district of Karradah, near a hospital and shops, a police officer said. Up to 28 people were wounded and at least 15 cars were damaged, he said.
A medical official confirmed the casualty figures. Both officials spoke on condition of anonymity as they were not authorized to release the information.
Early on Tuesday morning, mourners held a funeral procession for some of the dead. Men carried coffins wrapped in Iraqi flags as women wailed and pounded their chests in grief.
At the scene of the bombing, shocked residents examined the blood-stained pavement and the damage to nearby shops.
The Islamic State group issued a statement saying the suicide attack targeted Shiites. The Associated Press could not verify the authenticity of the statement, but it was posted on militant websites commonly used by the extremists.
Karradah is a major commercial area of the capital. Its streets are lined with clothing and jewelry stores, restaurants and cafes. The area is usually packed with shoppers, especially ahead of next week's Muslim holiday of Eid al-Adha, or the Festival of Sacrifice, which marks the end of the annual Hajj pilgrimage.
In early July, an IS-claimed bombing killed nearly 300 people in Karradah as Iraqis were preparing for the Eid al-Fitr holiday, which marks the end of the holy month of Ramadan. The Karradah disaster put the Iraqi government under pressure to improve security in the capital and to rein in corruption.
Monday's attack came nearly two weeks after authorities reopened the sealed off part of Karradah, where the July bombing took place, in an attempt to restore normalcy to the district.
In recent months, IS militants have turned to insurgency-style attacks in public areas far from the front lines after Iraqi government forces and allied militias pushed the extremists out of many areas they captured in western and northern Iraq during a mid-2014 blitz.
Late last month, Iraqi forces retook the town of Qayara, about 70 kilometers (45 miles) south of the IS-held city of Mosul, Iraq's second largest city. A string of villages and towns south and southeast of Mosul have been recaptured as part of an operation launched in March aimed at eventually unseating IS from the biggest city still under militant control in Iraq.
The militants set fire to a number of oil wells around Qaraya, first in an attempt to thwart airstrikes and then, when they withdrew, to leave behind a ruined prize.
On Tuesday, the spokesman for the Iraqi Oil Ministry, Assem Jihad, said in a statement that teams had extinguished fires in six wells, removed bombs planted nearby and stopped crude oil leaking into the Tigris river. Jihad added that there were still three wells on fire, but they are in areas under IS control.
Iraqi government is now gearing up for a major offensive to retake the northern city of Mosul from IS. It pledged to recapture the city this year.