Islamic State claimed a triple suicide attack on Thursday evening near a Shia mausoleum north of Baghdad that killed at least 35 people and wounded 60 others, according to Iraqi security sources.
The attack on the Mausoleum of Sayid Mohammed bin Ali al-Hadi reignited fears of an escalation of the sectarian strife between Iraq's Shias and Sunnis.
The Shia form a majority in Iraq but Sunnis are predominant in northern and western provinces, including Salahuddin where the mausoleum is located.
Prominent Shia cleric Moqtada al-Sadr ordered his militia, the Peace Brigade, to deploy around the mausoleum near Balad, about 58 miles (93km) north of Baghdad.
Sadr's militia is also deployed in Samarra, a nearby city that houses the shrine of Imam Ali al-Hadi, the father of Sayid Mohammed whose mausoleum was attacked on Thursday.
A 2006 bombing destroyed the golden dome of the shrine of Ali al-Hadi and his other son, Imam Hasan al-Askari, setting off a wave of sectarian violence akin to a civil war.
Pictures posted on social media showed a fire burning in the market located at the entrance of the Sayid Mohammed mausoleum. It was not clear if the site itself was damaged.
A man detonated an explosive belt at the external gate of the mausoleum at around 11pm, allowing several gunmen to storm the site and start shooting at worshippers on the occasion of the Eid al-Fitr festival, according to the security sources.
At least one gunmen blew himself up in the middle of the crowd while another was gunned down by the guard of the mausoleum before he could detonate his explosive belt.
The site also came under rocket fire during the attack, which was claimed by Isis. The ultra-hardline Sunni group said in a statement the attack was carried out by three suicide bombers wearing explosive belts.
The militants have lost ground since last year to US-backed government forces and Iranian-backed Shia militias, but recent bombings have shown they still have the ability to strike outside the territory they control in northern and western Iraq.
A massive truck bomb killed at least 292 people in a mainly Shia shopping area of central Baghdad over the weekend, in the deadliest single bombing since the US-led invasion that toppled Saddam Hussein in 2003