The bombing was claimed by the Sunni extremist Islamic State group.
Three car bombs killed at least 50 people in Iraq Monday, including 35 in a single blast north of Baghdad and 10 in a rare attack in the south, officials said.
The bombing in Zubayr, near Basra in southern Iraq, was claimed by the Sunni extremist Islamic State group, which has controlled swathes of the country since last year but was thought to have little reach in the deep Shiite south.
"At least 10 people were killed" in Zubayr, said Jabbar al-Saadi of the Basra provincial council's security committee, adding that 24 people were wounded.
The explosion, which occurred around 5:30 pm (1430 GMT), rocked a market area known as Souk al-Halaqin in Zubayr, just 10 kilometres (six miles) southwest of the oil hub of Basra, he said.
Bombings are rare in Iraq's south, which is predominantly Shiite and hard to penetrate for Sunni jihadist groups responsible for most such attacks in Baghdad and other parts of the country.
"The soldiers of the caliphate managed to detonate a parked car bomb amidst a gathering of polytheist Rafidha in Basra," said the IS claim posted on social media.
IS routinely uses the term Rafidha to refer to Shiite Muslims.
The Basra region has been spared the violence unleashed on other parts of Iraq by IS since last year, but feuding between rival Shiite armed groups and criminal gangs has risen lately.
Two other car bombs went off in areas north of Baghdad that have been routinely targeted by the jihadists.
A blast in a market area of Khalis, around 55 kilometres from the capital, killed at least 35 people and wounded 74, a senior police officer said.
Local councillor Uday al-Hadran as well as medical sources in Khalis and in the provincial capital Baquba confirmed the casualty toll.
Diyala, a religiously and ethnically mixed province that IS partly took over last year, was declared liberated by the government in January.
The jihadists, who consider Shiites heretics, no longer have fixed positions in the province, but have reverted to their old tactics of planting car bombs and carrying out suicide operations or hit-and-run attacks.
In Hosseiniyah, barely 20 kilometres (12 miles) north of Baghdad, a car bomb detonated in a busy area, killing five people and wounding at least 17, a police colonel said.
According to figures released by the UN Mission in Iraq on Thursday, 717 Iraqis were killed and 1,216 wounded in acts of terrorism, violence and armed conflict in September.
The Baghdad governorate alone accounted for 257 of the deaths.
The United Nations says its figures account only for the casualties that can be verified, and are likely to be far below reality.