Government says the explosions in Baghdad's Sadr City district occurred in a weapons depot housed within a mosque.
At least 18 people were killed and over 90 wounded in an explosion in Baghdad's Sadr City district on Wednesday, an Iraqi police source said.
Photos from the scene showed a destroyed car and building as well as weeping relatives of victims.
An interior ministry spokesman said in a brief statement the blast was the result of the detonation of an ammunition cache and that security forces had opened an investigation.
The ammunition had been stored in a mosque and the explosion happened during its transfer into a car parked nearby, the police source said.
Earlier, state television cited a ministry spokesman describing the explosion as "a terrorist aggression on civilians," which had caused "martyrs and wounded."
Authorities did not offer an explanation of the discrepancies between the two statements, neither of which gave casualty figures.
The officials said weapons were stored inside the mosque, which is frequented by supporters of Muqtada al-Sadr, a Shia cleric whose supporters once fought American troops in Iraq in the years after the US-led invasion of Iraq in 2003.
Al-Sadr's followers won the largest number of seats in Iraq's May 12 parliamentary elections but would have to form a coalition government with other blocs in a process that could drag on for months.
The incident has occurred at a crucial time when the old political elite defeated by Al-Sadr's coalition, which includes the secularists, is seeking a recount of the votes.
Al-Sadr also commands a government-backed paramilitary force, which took part in the nearly three-year war against Daesh, which had in 2013 and 2014 seized large swathes of Iraq's territory.
Iraq declared victory over Daesh last year, but the group retains pockets in western and northern Iraq and continues to stage attacks on security forces.