The suicide attack occurred in the Shaab neighborhood during lunchtime anonymous officials told the media as they weren't authorized to speak to them. The Islamic State has claimed responsibility according to its Aarnaq News Agency.
Hussein Khazem, who owns a clothing warehouse in the area said the jihadist blew him- or herself up inside a funeral tent. He witnessed the dead and wounded, many cars on fire and major damage to the local market nearby.
The dead included women, children and elderly people.
Khazem said that these types of incidents are happening again, "especially in the poorer residential neighborhoods."
The attack came at a time when Iraqi security forces prepare to retake Mosul, the second largest city, from ISIS.
Iraq has experienced several bombings over the past few months but this one was one of the worst thus far. But in July, a massive car bomb in central Baghdad's popular shopping district of Karradah killed about 300 people. After this horrific incident, the minister of the interior was forced to resign.