A suicide bomber detonated his explosive belt at a popular market in Dujail town in Salahuddin province in the evening, where a lot of people were shopping, the source said on condition of anonymity.
The casualties are preliminary and may increase, he said, adding that the Islamic State group is suspected behind the attack, though no group has claimed responsibility for it.
Iraq has seen frequent bombing attacks by IS militants across the country in recent months.
On Tuesday, up to 36 people were killed and 100 others wounded in a series of bombing attacks targeting Shiite neighborhoods in the capital Baghdad.
The terrorists frequently have targeted areas where large numbers of people gather, including checkpoints, markets, coffee shops and mosques.
Iraq has witnessed an intense wave of violence since the IS controlled sections of northern and western Iraqi regions in June 2014.
A UN report estimated that in April alone, 741 Iraqis were killed and 1,374 others wounded in terrorist attacks, violence or armed conflict throughout the country. Enditem