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Thousands turned up at the Kufa mosque after rumors swirled that Sadr was back home.
NPR: American Raid Follows Sadr's Return to Public Eye
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U.S. forces have been engaging Muqtada al-Sadr's Mehdi Army in Najaf, Karbala and Kufa.
CNN: Rumsfeld?visits Iraq's Abu Ghraib prison
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Following the blast, police said Kufa and Najaf -- both major Shiite cities -- were shut down for two hours.
CNN: Sunni Arab bloc rejoins Iraqi parliament
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Two years ago, the U.S. military and Shiite cleric Muqtada al-Sadr's Mehdi Army militia fought in and around Najaf and Kufa.
CNN: Car bombs target Shiites in Iraq
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Outside the cities of Baghdad and Kufa, Mr Sadr's support appears marginal.
ECONOMIST: Most Iraqis want peace, but it takes only a few to make war
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His support base lies elsewhere: in neighbouring Kufa, and in the Baghdad slum of Sadr City (named after his late father, a top cleric).
ECONOMIST: Can the new government uphold the rule of law?
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Kufa is part of the key southern province of Najaf.
CNN: Car bombs target Shiites in Iraq
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But it seems now, if you look at the Iraqi map, in the last 48 hours or so, the insurgency has spread to almost every single town, Baghdad, Kufa, Basra, Najaf, Nasiriya, Ramadi.
CNN: Professor: Insurgency 'has grown deeper roots'