Police said at least four people were wounded in Sunday's attack. A second Sunni mosque was attacked at the same time but damage was reported to be minor.
As residents combed the ruins of the building on Sunday, a column of armoured US and Iraqi Humvee vehicles nearby came under machinegun fire.
US troops could be seen running into buildings nearby. The area was rocked by an explosion that sent a large cloud of dust into the air.
The cause of the blast was not immediately clear. There were no immediate reports of any casualties.
Police in Hilla, close to the town of Haswa, said a curfew had been imposed.
Shia mosque attacked
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On Saturday, a suicide truck bomber exploded outside a Shia mosque in the town, killing 14 and wounding 21, Hilla police said.
The provincial health directorate and Baghdad police put the toll from that attack at 16. Only the mosque's minaret was left standing.
Mosques and other religious buildings have been frequent targets of attack.
The bombing of a revered Shia shrine, the al-Askariya mosque, in the town of Samarra last year sparked a wave of sectarian fighting between Iraq's majority Shia and minority Sunnis that has killed tens of thousands.