Iraqi authorities say more dead bodies have been recovered from the site of the massive weekend suicide bombing in central Baghdad, bringing the death toll to 175.

The staggering figure, announced on Tuesday, comes as Iraqis mourn ahead of the Muslim holiday of Eid al-Fitr, which marks the end of the holy month of Ramadan, under the pall of one the worst bombings in 13 years of war.

An Islamic State suicide bomber struck Baghdad's bustling commercial area of Karada on Sunday night, after people came out after breaking their daily fast.

The bombing showed the IS capability for launching attacks beyond the front lines, despite battlefield losses elsewhere in the country.

Police say there are still people missing and that the death toll could rise further.