The attack happened in the morning at Saqlawiya, 12 miles northwest of Fallujah, police Lt. Zeidan Mustafa said. The three dead were all guard members, he said.
A number of people were also injured, said Ahmed Saleh Sarhan, who witnessed the explosion. Details were not immediately available.
The U.S. military and National Guard in the capital, Baghdad, had no information on the attack.
The National Guard is the centerpiece of U.S. plans to turn over security responsibilities after elections slated for January. Guardsmen and Iraqi police have been repeatedly targeted by insurgents who are trying to undermine the interim government and drive out the U.S.-led coalition.