Paul Bremer, the American leading Iraq's interim administration, pledged the US-British coalition would do 'everything possible' to track down the attackers.
He said: 'The bombing shows again that the enemies of the new Iraq will stop at nothing. Again, they have killed innocent Iraqis. Again, they have violated one of Islam's most sacred places. Again, by their heinous action, they have shown the evil face of terrorism.
'The Iraqi police have our full cooperation in this important investigation. On behalf of the Coalition Provisional Authority, the American people and all friends of Iraq, I express my deepest sympathy to the families of those killed and to the injured and their families.'
There has been considerable unrest among the religious communities in the holy city, which lies 110 miles south-west of Baghdad.
Today's bombing comes one week after a device exploded outside the house of one of Iraqi's most important Shia clerics, killing three guards and injuring 10 others including family members.
A gas cylinder, which had been placed along the outside wall of the home of Mohammed Saeed al-Hakim in Najaf, exploded just after noon prayers July 22.
The Al-Hakims are one of the most influential families in the Shia community in Iraq, and Iraqi newspapers reported two weeks ago that the cleric had received death threats.
This slaughter is incredibly bad news. Bremer's bromides are not going to reassure al-Hakim's followers in SCIRI. The Shi'a have been relatively quiet. SCIRI and al-Dawa, the principal Shi'a parties, both sit in the
nongoverning council. THE CPA cannot protect the UN or its Iraqi allies. Perhaps presidential speeches and press conferences are not enough to establish security in Iraq.