A suicide bomber blew himself up in a commercial street of Baghdad on Sunday, killing seven and wounding 28, according to police sources.
The terror group DAESH claimed responsibility for the attack via its media outlet, Amaq.
Iraqi officials say the bomber detonated his explosives in Iskan, a mostly Shi'ite district in the west of the Iraqi capital.
People were setting up tents for a major Shiite religious observance, Ashoura, which commemorates the death of Prophet Muhammed's grandson, Hussein.
DAESH has stepped up bomb attacks in government-held areas this year as it loses territory to US-backed Iraqi forces and Iranian-backed Shi'ite militias.
The group continues to control vast areas of northern and western Iraq, including the city of Mosul which was captured in 2014.