A car bomb has killed at least 27 Shia Muslim pilgrims in the town of al Musayyib, south of Baghdad, as worshippers from around the world thronged Iraq's shrine city of Karbala to finish mourning rituals for a revered figure in Shia Islam.

Thursday's attack came despite a massive security operation mounted to safeguard the millions of pilgrims travelling to and from Karbala for the conclusion of Arbaeen commemorations.

Al Jazeera's Omar Al Saleh, reporting from Fallujah, said: "We understand that the pilgrimage has ended and that the Shia pilgrims are starting to head back from Karbala, the town of al Musayyib is on the way back to Baghdad.   

"We understand that security is very tight, and it's obvious that this is a breach of security, this is a setback for the security of this country."

Arbaeen marks 40 days after the Ashura anniversary commemorating the slaying of Imam Hussein by the armies of the caliph Yazid in 680 AD.

No group immediately claimed responsibility for the attack.