The remains were uncovered by workmen digging a new water pipe in the centre of the city known for its Shia shrine. They called the police, who cordoned off the area. Clothing found with the bodies indicated that they included men, women and children.
"The remains of dozens of victims were found in the pit - some 500 metres from the mausoleum of Imam Hussein," Abdul Rahman, a Karbala police spokesman, told news agency AFP. Shia pilgrims converge on Karbala twice a year to mark the death of Hussein, the Prophet Muhammad's grandson, 1,300 years ago.
Several mass graves containing thousands of bodies have been uncovered since the fall of Saddam Hussein in April 2003, notably in the Shia south and Kurdish north.