"A car bomb exploded around 7:30 pm (1630 GMT) in the Shahid Rustum camp, two kilometres (one mile) east of the town of Makhmur, killing and wounding people," said the official from the Patriotic Union of Kurdistan (PUK).
The camp is home to some 12,500 people from southeastern Turkey, supporters of the Kurdistan Workers' Party (PKK) which Turkey considers a terrorist group.
Control of Makhmur is disputed between Iraq's Kurdish autonomous region and Baghdad.
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