Iraq is observing three days of mourning for scores of people killed in Iraq's bloodiest day since the war.
Mourners blame the US for failing to protect them
Tuesday's blasts in Baghdad and Karbala - at the climax of a Shia festival - killed 271 people, Iraqi officials say. The US had earlier put the toll at 117.
The US has evidence linking Jordanian al-Qaeda suspect Abu Musab al-Zarqawi to the attacks, a top commander says.
But a letter purporting to be from al-Qaeda sent to a London-based Arabic newspaper has denied any involvement.
Journalists at the al-Quds al-Arabi newspaper, which received a letter signed by a group said to be linked to al-Qaeda - the Abu Hafs al-Masri Brigades - said they believed the document was genuine.
Fifteen people were arrested in Karbala after the blasts, including five people believed to be Iranians.
One day after the attacks, the death toll was rising sharply, though there is a discrepancy between figures given by Iraqis and US officials.
"The number of martyrs from the two cities as of this afternoon is 271," Iraqi Governing Council President Mohammed Bahr al-Uloum told a news conference in Baghdad on Wednesday.
"We have clear intelligence that ties Zarqawi to this attack," the commander of US forces in Iraq, Gen John Abizaid said on Wednesday.
"We also have intelligence that shows there are some linkages between Zarqawi and former regime elements, particularly the Iraqi intelligence services," he told the House Armed Services Committee.
US officials say a letter from Mr Zarqawi urging attacks on Shia Muslims was intercepted last month.
In Baghdad, dozens of trucks and buses packed with people dressed in mourning black arrived at Kadhimiya mosque, where scores were killed when thousands of pilgrims were massed around the shrine.
About 110 kilometres (70 miles) south in the city of Karbala, the first funerals took place a day after the devastating explosions around the Imam Hussein mosque.
MAJOR ATTACKS SINCE 1 MAY
2 Mar 2004: Up to 271 Shias killed in Baghdad and Karbala during the Ashura religious festival
1 Feb 2004: At least 101 killed by twin suicide bombings during celebrations in Kurdish city of Irbil
18 Jan 2004: 18 reported killed outside coalition HQ, Baghdad
14 Dec 2003: Car bomb at police station kills 17 in Khalidiya, west of Baghdad
12 Nov: 26 die in suicide attack on Italian base in Nasiriya
2 Nov: 16 US soldiers die as Chinook helicopter downed
27 Oct: Red Cross and other buildings in Baghdad bombed, more than 30 killed
29 Aug: Mosque near Najaf bombed, at least 80 dead including top Shia cleric
19 Aug: UN headquarters in Baghdad bombed, 23 killed including head of mission
List covers attacks since US declared war effectively over
Huge crowds chanting "God is greatest" gathered, as coffins draped with palm leaves and Iraqi flags were carried aloft through the streets.
Mourners were mostly calm, but some were angry at extremist Sunni Muslims whom they blamed for the attacks.
A top Shia cleric, Ayatollah al-Sistani, criticised the US for inadequately securing the country's borders from foreign attackers.
A US official said terrorists were believed to have crossed into Iraq with Iranian pilgrims planning to celebrate Ashura - a commemoration of the death of Imam Hussein in 680.
The White House has said the handover of sovereignty to the Iraqis will go ahead at the end of June, as planned, although the signing of the new Iraqi interim constitution agreed earlier this week has been delayed until Friday because of the period of mourning.