Daesh targeted an area in southern Iraq used by Shia pilgrims and visitors from neighbouring Iran who are headed for the holy cities of Najaf and Karbala.
Three suicide attacks claimed by Daesh killed at least 74 people in southern Iraq on Thursday, a health official and police sources said, suggesting a shift in the ultra-hardline group's tactics since it lost control of its stronghold in Mosul.
Iraqi officials say the Daesh militants are likely to wage a guerrilla war in Iraq after their self-proclaimed caliphate in Mosul collapsed.
Daesh is also under siege in the Syrian city of Raqqa, its operational base for attacks in the Middle East and the West.
Thursday's attack killed at least 74 people, including seven Iranians, and left another 93 wounded, said Abdel Hussein al-Jabri, deputy health chief for the mainly Shia province of Dhiqar.
Security officials described Thursday's attacks as an attempt to send a message to Daesh followers that the group is still strong and can operate in other parts of Iraq following its territorial losses.
"After losing the war in Iraq and the shrinking of its power, Daesh returned back to its old style of an insurgency, by carrying out suicide attacks, which is a clear sign that the terrorist group is retreating," said police intelligence Colonel Murtatha al-Yassiri.
Daesh activity is usually concentrated in western and northern Iraq. Bomb attacks in the mostly Shia south, where the bulk of the country's oil is produced and security forces hold a tighter grip, have so far been relatively rare.
Like its predecessor in Iraq, al Qaeda, Daesh seeks to create sectarian tensions as a way to destabilise the OPEC oil producer.
"We expect more alike terrorist operations in future. Daesh is trying to desperately pretend among followers that it's still strong," al Yassiri said.
TRT World's Ammar Karim has the latest from Iraqi capital Baghdad.
Wearing security force uniforms and driving stolen army vehicles, the attackers targeted a police checkpoint and two restaurants on a highway near the city of Nassiriya, using car bombs and suicide vests, the sources said.
At least 100 people were injured, the police said in a statement.
Daesh claimed responsibility in a statement on its Amaq news agency. The group said it had killed "dozens of Shias."
The head of Nassiriya's health directorate, Jassim al-Khalidi, said the city's hospital had received 50 bodies and the death toll could rise because some of the wounded were in critical condition.
Hospital sources said at least 10 Iranian pilgrims, who were visiting holy Shia shrines, were among the dead.
The deadliest attack was at a restaurant west of Nassiriya.
"One attacker blew up his suicide vest inside the crowded restaurant while a group of other gunmen started to throw grenades and fire at diners," said police Colonel Ali Abdul Hussain.
Police sources said some police officers had died in the checkpoint attack, but the toll from that incident remained unclear.
Security sources said forces were placed on alert in most of the southern provinces, including the oil city of Basra, in case of similar attacks.