The incident involved the Iraqi army and members of the Hashed al-Shaabi, mainly pro-Iran Shiite former paramilitaries integrated into the Iraqi security forces, an interior ministry official told AFP under cover of anonymity due to the issue's sensitivity.
The pre-dawn clash occurred about five kilometres (three miles) from Karbala's old city when four Hashed vehicles attempted to go through an Iraqi army roadblock on a street reserved for pedestrian pilgrims, the official said.
The army prevented the vehicles from passing although both sides fired weapons into the air without causing injuries, the official added.
At the time of the standoff and gunfire, hundreds of thousands of Shiite pilgrims marking Arbaeen were converging on Karbala and the mausoleum of Imam Hussein, a founding figure of Shiite Islam and the grandson of the Prophet Mohammed.
Arbaeen marks the end of the 40-day mourning period for the killing of Imam Hussein by the forces of the caliph Yazid in 680 AD.
Last year 22 million pilgrims -- many from Iran -- attended Arbaeen, according to official figures.
The interior ministry official said six Hashed members were arrested by a security unit of their own institution after the incident.
A Hashed official confirmed the arrests.
"An investigation is ongoing to identify who was responsible for opening fire in the middle of pilgrims," said the official, who asked not to be named because of the matter's sensitivity.
The Hashed were created in 2014 to fight Islamic State group jihadists whose advance the regular army failed to stop.
They remain a politically and militarily powerful group, some of whose fighters -- despite their integration into Iraq's security forces -- periodically clash with other security institutions.
Since August 6 around 2.9 million pilgrims have entered Iraq for Arbaeen, according to official figures. Commemorations reach their peak on Sunday.
