Community devastated by Melbourne schoolgirl's death in ISIS bomb attack

Family, friends and the community are struggling to cope with the "terrible" loss of a 12-year-old Melbourne schoolgirl Zynab Al-Harbiya, who was killed in a terrorist attack in Iraq.

She was farewelled on Wednesday in a traditional Muslim prayer service in the northern suburb of Fawkner.

Melbourne schoolgirl Zynab Al Harbiya was killed in a suicide bombing in Baghdad. Source: Supplied

The Year 7 girl was killed when an Islamic State bomb exploded in a busy ice cream parlour in Baghdad on Tuesday.

IS claimed responsibility for the attack, in statements released online, saying its suicide bombers had targeted gatherings of Shi'ite Muslims

Family friend Yasser Alaskary said the community and family were doing what they could to cope with the "terrible" loss.

The bombs killed at least 27 people and wounded more than 80 others. Source: Twitter

"Everyone is just in shock... we don't understand why this happened at all," he said.

Zynab was buried on Tuesday in the Najaf cemetery, outside Baghdad.

She had left for Iraq with her family on May 18 to visit her sick grandfather.

The suicide bomber targeted a 'gathering of Shiites'. Source: Twitter

"Zynab had gone to Iraq for a short trip with her parents to visit her ailing grandfather," a statement from the family earlier in the week said.

"That night she had begged her mum to take her to a local ice-cream parlour at the end of a long hot day fasting. She will now never make it back home.

"Her friends and family are left devastated."

The bomb wounded her mother and uncles.

A second car bomb also went off at rush hour, killing 14 and wounding at least 37 people