The bomber struck as condolences were being given at the funeral of the fighter from tribal paramilitaries battling the Islamic State group.
He detonated an explosive belt outside a mosque in Al-Mashahada some 40 kilometres (25 miles) north of Baghdad, the security source said.
The military command in the capital said the attack killed a guard and two civilians, while a medical source said that another 12 people were wounded.
Despite being under increasing pressure in both Syria and Iraq, IS cells remain active north of Baghdad.
The jihadist group has carried out bloody attacks both in the capital and across the country.
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