The toll for a massive suicide car bomb attack carried out by the Islamic State group north of Baghdad rose to 90 dead and 17 missing Saturday.

The top official in Khan Bani Saad, the predominantly Shiite town 20 kilometres (12 miles) north of Baghdad where the attack occurred on Friday, put the number of wounded at 120.

"The toll so far is 90 martyrs and 120 wounded, and we have between 17 and 20 missing," Abbas Hadi Saleh told AFP at the scene.

He said 15 children were killed in the attack, which ripped through the heart of the town's market area as people were shopping on the eve of the Eid al-Fitr holiday marking the end of Ramadan.

"Every year (during Ramadan) there's a bombing. We are guilty of being Shiite," Saleh said. "This is the biggest in Diyala since 2003."

Khan Bani Saad is located in Diyala province, which the government declared free of IS in January but where sporadic attacks have been on the rise in recent weeks.

IS said Friday's suicide bomber had three tonnes of explosives in his vehicle. The death toll is one of the highest since the jihadists launched their nationwide offensive in June 2014.

An AFP correspondent said the blast caused massive destruction and left a crater in the street that is five metres wide and two deep (16 feet wide and more than six deep).