The blast struck at 11:00 am (0800 GMT) in the town of Taji, around 25 kilometres (15 miles) north of Baghdad. The majority of the victims were members of the Sahwa, or anti-Qaeda militias, but soldiers were also among the casualties.
The Sahwa, otherwise known as the Awakening Councils or Sons of Iraq, are made up of a collection of Sunni tribal militias that sided with the US military against Al Qaeda from late-2006 onwards, helping turn the tide of Iraq's bloody insurgency.
They are often targeted by Sunni militants linked to Al Qaeda who regard them as traitors.
The Sahwa militiamen recently saw their government salaries increased, a move by authorities to appease weeks of anti-government demonstrations in majority-Sunni areas in Iraq's north and west.