About 2,400 Italian troops are currently deployed in Iraq as part of the international peace effort.
Carabinieri are seen in Italy as toughest arm of police
They include 400 carabinieri police officers.
The troops were sent to Iraq in June after the end of the war to stabilise and help rebuild the country.
Among their tasks there is the distribution of humanitarian aid to the local population, as well as restoring infrastructure and essential services.
The Italian contingent, which is part of the UK-led multinational force in southern Iraq, is in charge of the Dhi Qar province.
Until Wednesday's blast, Italian troops had only been engaged in minor clashes in mid-September, when former Iraqi servicemen asking for their pay staged violent protests at a stadium in Nasiriya.
A few days later, Carabinieri were caught in the crossfire at a police station, but there were no casualties.
Despite the Italian Government's official support of the US-led campaign in Iraq, the vast majority of the population was against the war.
Hundreds of thousands of peace flags appeared at people's windows during the war, and some have never been removed.
Carabinieri are part of Italy's military structure, but their tasks are very similar to those of the state police force, the Polizia di Stato.