Suspected Sunni gunmen dragged a group of Pakistani and Indian travellers off a bus crossing the desert towards the Shia holy city of Karbala and shot dead 11 Pakistani and three Indian men.

"They were coming in a big bus with children and women. The attackers freed the women and children and shot dead the men, execution-style," said interior ministry spokesman Brigadier General Abdul Karim Khalaf.

Karbala city health director Salim Kadhim confirmed the death toll, and said the bus had taken a route past Ramadi, a stronghold of Sunni Arab rebels, who are often blamed for murderous attacks against Iraq's Shia majority.

The murders came as Iraq was already braced for a possible backlash from Shia militias after a synchronised series of bomb attacks in Baghdad on Thursday by suspected Sunni insurgents left 67 civilians dead.

Prime Minister Nuri al-Maliki -- whose coalition government is struggling to hold the divided country together -- travelled to the Shia holy city of Najaf to consult the faith's spiritual leader, Grand Ayatollah Ali al-Sistani.

Sistani urged Maliki to quickly gain control of the violence.

"His eminence said when the government fails to do its duty in providing security, order and protection for citizens, this could pave the way for other powers to intercept and carry out this mission," Sistani's office said.

"This is very serious," he warned.

Sistani was alluding to the rise of Shia militias, such as the Mahdi Army of radical cleric Moqtada al-Sadr and the Badr Organisation of the Supreme Council for the Islamic Revolution in Iraq (SCIRI), a leading religious party.

After the meeting, Maliki said: "His eminence thinks the state should be powerful and united and this obviously means that all weapons should be in the hands of the state.

"We are still looking for an opportunity to be able to finish with this issue," he said, when asked about the militias.

Both SCIRI and Sadr are supporters of Maliki's coalition government, but their unofficial armies are seen by some as a danger to Iraq's stability at a time when the Pentagon is warning that it is close to sectarian war.

A quarterly report from the US Department of Defence painted a sombre picture of a still powerful anti-government insurgency and mounting violence between the bitterly divided Sunni and Shia communities.

Since its last report, the Pentagon said, "the core conflict in Iraq changed into a struggle between Sunni and Shia extremists."

The report covered the period between May and the end of July, which was marked by Iraq's worst bloodshed since the US-led invasion of March 2003.

"The average number of weekly attacks increased 15 percent over the previous reporting period average... Iraqi casualties increased by 51 percent compared to the previous quarter," the report said.

Iraqi and US officials in Baghdad say that civilian casualties dropped significantly in August thanks, they say, to a beefed up security plan in the war-torn capital and the increasing competence of Iraqi security forces.

Nevertheless, the last few days of August were marked by a series of bloody attacks and clashes with both Sunni insurgents and Shia militias.

The Pentagon report said armed factions from both sides of Iraq's religious divide "are locked in mutually reinforcing cycles of sectarian strife".

"Concern about civil war within the Iraqi civilian population and among some defence analysts has increased in recent months," it added.

"The security situation is currently at its most complex state since the initiation of Operation Iraq Freedom."

Maliki on Saturday also said that he will reshuffle his cabinet. Four ministers will lose their current jobs, he said, amid speculation that the key interior or defence ministry posts could be one of them.

Meanwhile, in a sign of the violence gripping Iraq, at least 18 other people were killed across Iraq on Saturday.

A car bomb exploded in a farmers' market in al-Mashrua, 60km south of the capital, killing four civilians and wounding 13.

Iraqi police also reported that six civilian truck drivers suspected by insurgents of carrying supplies for US forces had been ambushed and killed north of Samarra.

In the restive city of Baquba, north of Baghdad, six people, including three policemen, were shot dead.

Two civilians were killed in another car bombing in Baghdad and police also found two corpses in the town of Kut, south of the capital.

Iraq also announced that it had regained control of the infamous Abu Ghraib prison from US authorities and that its cells were now empty.