"At 7 pm (1600 GMT).. an explosion occurred in logistics warehouses belonging to the 42 Brigade.. in the Yusufiyah area, south of Baghdad," said the Hashed al-Shaabi -- an alliance of pro-Iranian former paramilitary groups now integrated into the regular army.

Firefighters were battling the blaze, the Hashed added in a statement.

A security source confirmed the blast, adding that it "occurred in a warehouse storing equipment that belongs to Hashed al-Shaabi".

A Hashed official said he did not rule out the possibility of an "air strike".

In April, one person was killed and eight wounded in a blast at a military base housing Hashed groups in Babylon province, south of Baghdad.

An investigation found the blast was caused by munitions stored on-site, not by an air strike.

The Hashed al-Shaabi is an integral part of the Iraqi security apparatus under the authority of the prime minister.

It includes some pro-Iran groups which have carried out dozens of attacks against US forces in Iraq and neighbouring Syria.

The latest blast comes after two drones were launched on Tuesday against an Iraqi base used by US-led troops without causing any damage.