The bomb exploded at about 1:30 pm (1030 GMT) at a restaurant where three buses carrying pilgrims were parked on a highway near Balad, north of Baghdad, according to a police officer.
Jawad Abdul Kadhim, the head of the Balad hospital, said the attack killed an Iranian woman and two Iraqi men and wounded 25 people.
The pilgrims were on their way to visit the Al-Askari shrine in Samarra. The shrine had been previously bombed by militants in February 2006, and had sparked a wave of sectarian violence that killed a large number of people.
The attack occurred during the Muharram religious commemorations marking the death of Imam Hussein, who was killed by armies of the caliph Yazid in 680 AD.
Along with the security forces, the Shiite majority in Iraq has been a main target of Sunni Arab armed groups since the fall of Saddam's Sunni-dominated regime.
Violence has declined dramatically since the 2006-2007 peak of sectarian bloodshed, but attacks remain common.
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Where are the protestors protesting the killing of these muslims by other muslims? Funny how a movie or a burning of book takes precedence over the lives of human beings. Now there's a shocker, NOT!