Injured people were rushed from the scene in ambulances after the explosion in the al-Ashaar market in the city 550km (340 miles) from Baghdad.

Reports say there may have been two explosions at the market.

Police officials said a power generator had malfunctioned.

Private communal generators are common in Iraq, where demand for electricity dramatically outstrips supply, forcing the use of unpopular rationing.

Chronic power shortages triggered protests across the country over the summer, including in Basra, where two people died in June when police opened fire on protesters.

The country's electricity minister resigned later that month.

Basra, the main city in the largely Shia Muslim south of Iraq, has been comparatively free of insurgent violence this year.