Sixteen people were killed and 45 wounded on Wednesday when twin car bombs exploded at a bus terminal and market area in southwestern Baghdad, Iraqi police said.

The coordinated explosions at the bus terminal in Baghdad's Bayaa neighbourhood took place as hundreds of thousands of Iraqi Shi'ites are making their way toward a holy city for an annual pilgrimage, a ritual often targeted by insurgent attacks.

The biggest bombing in Baghdad in weeks also wrecked several cars and scattered debris across the muddy ground. One witness told Reuters that the victims included children.

Violence that broke out across Iraq after the 2003 U.S.-led invasion has dropped sharply in the past year but suicide attacks and car bombs still occur frequently.

Hundreds of thousands of pilgrims travel on foot and by bus for the Arbain pilgrimage to a holy shrine in the city of Kerbala south of Baghdad. Police did not immediately say whether pilgrims were targeted in the strikes on the bus terminal.

Shi'ite pilgrims were the targets of other attacks on Wednesday, including a roadside bomb in Waziriya in northern Baghdad, which killed one pilgrim and wounded six others as they made their way toward Kerbala, police said.

It also wounded six civilians in a minibus.

Another roadside bomb struck Shi'ite pilgrims in southern Baghdad, killing one and wounding five, police said.

Staffan de Mistura, who heads the United Nations mission in Iraq, condemned "murderous" attacks against pilgrims, "clearly designed to provoke sectarian tensions".

Arbain, which marks the end of a mourning period for the anniversary of the death of the Prophet Mohammad's grandson Hussein in a 7th century battle, is one of the holiest days of the Shi'ite calendar.

It is one of several annual rites that have become shows of strength for Iraq's Shi'ite majority. Such rituals were suppressed under former dictator Saddam Hussein, and have since frequently been targeted by suspected Sunni Islamist militants.