A police officer says the first car was parked inside a bus station in the town of Khalis, killing three and wounding 10 others.
He added that the second one exploded in the town's outdoor grocery market, killing four civilians and wounding eight.
The Shiite-majority town is located about 80 kilometres north of Baghdad.
A medical official confirmed causalities. Both spoke on condition of anonymity as they were not authorized to release information.
The attack came a day after Iraqi security forces reported progress in recapturing some areas in the western city of Ramadi from the Islamic State militants who control about a third of Iraq and neighboring Syria.
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