IS claimed in its statement that the blast had killed more than 60 and wounded more than 100.
Haidar Kadhem, 20, survived the explosion.
“I was maybe 50 metres from the spot. The blast was extremely loud,” he told AFP by phone.
“Most of the crowd were young people, I could see them strewn across the field, some dead, others wounded asking for help. It was just chaos,” he said.
IS targeting civilians
Iskandariyah is part of a mixed Sunni-Shiite area south of Baghdad which was once dubbed “the triangle of death” and has been badly affected by sectarian violence in the last decade.
Pushing back IS in this region after the jihadists took over large parts of the country in 2014 was one of the priorities of the government and allied Shiite militias.
That was achieved in a few months and IS has been largely eradicated from the area but violence – sectarian and criminal – has remained frequent.
Further south, at least 61 people were killed when a truck bomb exploded at a checkpoint at the entrance to the city of Hilla on March 6.
The attack was the deadliest car bomb explosion in Iraq this year.
The jihadist group has been losing territory steadily in Iraq for almost a year.
In the most recent operations, Iraqi forces have been gaining ground in the western province of Anbar and have just begun their reconquest of the province of Nineveh.
In the cities the group retains control, however internal tension appears to be on the rise and the lack of supplies is taking a toll.
Observers have warned that, as their self-proclaimed “caliphate” shrinks towards extinction, IS fighters are likely to revert to their old guerrilla tactics and ramp up suicide attacks on civilian targets.