At least 70 people were killed and hundreds wounded in Karbala, a Shi'a holy city. In Baghdad, around 58 people were killed and 200 more were wounded.
The explosions -- in cities about 100 kilometers apart -- occurred almost simultaneously, leading to the conclusion that they were part of a coordinated attack. No one has claimed responsibility.
In Karbala, five blasts went off shortly after 10 am near one of the most important holy places in Shi'a Islam -- the shrine to Abbas, a grandson of the prophet Muhammad. The explosions sent the crowds into panic.
Dead bodies were piled in the street as the wounded were taken away to hospitals.
It was not immediately clear how the attack was carried out. Witnesses said the bombs appeared to have been hidden in bags or boxes. Iraqi authorities initially claimed the blasts were caused by suicide bombers. Officials with the Polish military -- which controls the area around the city -- said the explosions resulted from mortars fired into the crowds.
At about the same time, three explosions rocked the Kazimiya shrine in northwest Baghdad. Panicked men and women, dressed in black, fled screaming and weeping as ambulances raced to the scene.
Crowds of enraged survivors swarmed nearby hospitals. Some said they blamed the U.S. for stirring up religious tensions by launching the Iraq war. Others blamed Al-Qaeda or Sunni Muslim extremists.
It wasn't immediately clear what caused the Baghdad explosions. The French news agency AFP reports that three rockets were fired at the shrine -- one struck the building and two others fell nearby.
The explosions came as the streets in Karbala and the Shi'a areas of Baghdad were packed with people marking the Shi'a festival of Ashura. The festival commemorates the gruesome death in battle some 1,400 years ago of Imam Hussein, the grandson of the Prophet Muhammad.
Reports say the explosions threaten to ignite further sectarian violence between the majority Shi'a population and Sunnis, who dominated Iraq before a U.S.-led coalition ousted President Saddam Hussein, a Sunni, last year.
Security in Karbala had been tight because of fears the festival would be the target for attacks. The festival was banned under Saddam Hussein's regime for fear it would foment rebellion.
About two million Shi'a from Iraq as well as Iran, Pakistan, Afghanistan, and other countries are in Karbala to mark the holiday.
Imam Hussein is buried in Karbala and the blasts occurred near the golden-domed shrine which contains his tomb. The Kazimiya shrine in northern Baghdad contains the tombs of two other Shi'a holy figures, Imam Mousa Kazem and his grandson, Imam Muhammad al-Jawad.
The violence comes just a day after Iraq's Governing Council agreed on an interim constitution, putting aside -- at least temporarily -- differences between Shi'a and Sunni Muslims and Iraqi Kurds on issues such as the role of Islam in Iraqi law.
For an analysis of the terrorist attacks in Iraq see: Iraq: Shi'a Leaders Say Attacks May Be Attempt To Stir Communal Violence