A suicide bomber driving a car killed at least 17 people and wounded more than 40 others on Saturday in an attack near a group of Shi'ite Muslim pilgrims in a southeastern suburb of Baghdad, Iraqi police sources said.

There was no immediate claim of responsibility for the blast at a market in the Nahrawan district but Islamic State militants regularly attack Shi'ite Muslims, whom they consider apostates.

The pilgrims had been heading to Baghdad's Imam Kadhim shrine to commemorate the 8th century death of one of Shi'ite Islam's senior figures.

Security has gradually improved in Baghdad, which was the target of daily bombings a decade ago, but attacks against both the security forces and civilians are still frequent.

The rise of Islamic State, which is fighting government forces for control of swathes of northern and western Iraq, has exacerbated the country's sectarian conflict, mostly between Shi'ites and Sunnis, which emerged after the 2003 US-led invasion.