Unconfirmed reports said the victims were children walking to school in the capital's Fadel area.
Stores selling alcohol have been targeted before by religious extremists.
Also in Baghdad, gunmen firing from two cars shot and killed two police officers in southwestern Baghdad's Sadiyah neighborhood.
Meanwhile, a British official in the southern city of Al-Basrah said three Iraqi employees of the British military base in the city have been kidnapped from their homes.
Relations between the British military contingent in Al-Basrah and locals have worsened since the emergence of a video showing British forces beating young Iraqi protesters in 2004.
(compiled from agency reports)