A suicide truck bomb killed more than 80 people, most of them Iranian Shi'ite pilgrims, at a petrol station in the city of Hilla 100 km (62 miles) south of Baghdad on Thursday, police and medical sources said.
Islamic State (IS), the ultra hardline Sunni militant group that considers all Shi'ites to be apostates, claimed responsibility for the attack in an online statement.
The pilgrims were en route back to Iran from the Iraqi Shi'ite holy city of Kerbala, where they had commemorated Arbaeen, the 40th day of mourning for the killing of Imam Hussein, a grandson of the Prophet Mohammad, in the 7th century AD, the medical sources said.
The gas station has a restaurant in its premises that is popular with travellers. Five pilgrim buses were torched by the force of the blast from the explosives-laden truck, a police official said.
Islamic State has intensified attacks over the past month in areas out of its control in efforts to weaken a US-backed military offensive launched on 17 October to retake Mosul, the last major city under IS control in Iraq.
Iraqi troops drove Islamic State militants from three more neighborhoods in the northern city of Mosul, a commander said. Brig. Gen. Haider Fadhil of the special forces told the Associated Press that his men have retaken the neighborhoods of Amn, Qahira and Green Apartments, and were expanding their foothold in the densely populated district of Zohour.
The neighborhoods are all east of the Tigris River, where most of the fighting has taken place since the government's campaign to liberate the city began last month.
Prime Minister Haider al-Abadi meanwhile flew to an airstrip outside the town of Tal Afar, to the west of Mosul, on a previously unannounced visit on Thursday, according to footage aired by the state-owned Iraqiya television network. The airstrip was seized from IS by state-sanctioned Shiite militiamen earlier this week.