The fire broke out in a site in Ahmed al-Waeli Street in central Karbala on Sunday afternoon, according to Baghdad Today.
The fire department of Karbala put out the fire, it said, adding that the incident had no casualtuies.
Investigation is underway to determine the cause of the incident.
In February last year, a fire in a Karbala hotel left several pilgrims dead.
The city of Karbala is home to the holy shrines of Imam Hussein (AS), the third Shia Imam, and his brother Hazrat Abbas (AS).
Every year, millions of pilgrims from all over Iraq and other countries travel to the city to visit the holy shrines.
This year, however, the number of pilgrims has significantly declined due to the coronavirus pandemic.