At least 841 people were killed and 323 others injured after a fake suicide bomb alarm triggered stampede on a bridge over the Tigris river in Baghdad on Wednesday.

"We now expect the death toll to hit 1,000," a health ministry official said.

"Someone among the people walking on the Aaimma bridge in al- Aadhamiya district suddenly shouted 'there is a suicide bomber on the bridge'. Then lots of people on the bridge panicked and they pushed each other and jumped into the Tigris," an interior ministry source said, adding most of the killed were women and children.

About 1 million pilgrims from many parts of Baghdad and other provinces gathered near the Imam Mousa al-Kadim shrine in the capital's Kazimiyah district for the annual commemoration of the death of the seventh of the most sacred 12 Shiite Imams.

At the time of the tragedy, a huge number of people were rallying and marching toward the mosque.

All roads leading to the site have now been cordoned off by Iraqi police.

In Baghdad's children hospital, Xinhua correspondent saw that 51 bodies and 45 wounded have been admitted.

One wounded Iraqi told Xinhua that the government should take responsibility for it, because the tragedy was triggered due to sheer mess of the organization.

A doctor of the hospital told Xinhua that there has had no empty bed and lots of the wounded could only lay on the ground.

Iraq's Interior Minister Bayan Jabor blamed a "terrorist" for spreading rumour that there was a suicide bomber among the crowd, causing the tragic stampede.

"What happened is that people started pushing and crushing after one terrorist spread rumour that there was a suicide bomber in the crowd," Jabor told television.

Iraqi Prime Minister Ibrahim al-Jaafari declared a three-day mourning period following the accident, state TV said.

As the deadliest incident since the US-led war on Iraq in March 2003, Wednesday's stampede came at a time when tensions were running high between the country's major religious and ethnic communities before a referendum on a draft constitution due in October.

Earlier in the day, seven Iraqi civilians were killed and at least 36 others wounded when mortar rounds landed in different areas in Baghdad, the interior ministry source told Xinhua.

However, Defence Minister Saadoun al-Dulaimi ruled out that Wednesday's stampede was related to sectarian tensions.

"What happened has nothing at all to do with any sectarian tension," al-Dulaimi said live on television.

"Only the seven that were killed this morning were killed by terrorists," he said, referring to those killed by the mortar attack earlier Wednesday.

A little known Sunni group claimed responsibility for the mortar attack, an Internet posting said.

Jaysh al-Taefa al-Mansura (Army of the Victorious Sect) said in a statement that its fighters fired mortars and missiles at a gathering of "apostates" in Kadhimiya.

The authenticity of the statement cannot be immediately verified.

Source: Xinhua