"The latest report said that seven civilians were killed and some 30 others wounded at the busy market in eastern Baghdad," the source told Xinhua on condition of anonymity.
The attack occurred in the afternoon when a booby-trapped car parking at a marketplace near al-Baiydhaa cinema building detonated in Baghdad al-Jadida district in the eastern part of the capital, the source said.
The blast damaged several nearby shops and destroyed many stalls at the outdoor market, along with destroying several civilian cars at the site of the explosion, the source added.
Iraq is currently witnessing a wave of violence since the Islamic State group took control of parts of Iraq's northern and western regions in June 2014.