The gunman apparently opened fire from a moving car as the worshippers were marking the holiday of Ashura, which commemorates the killing in 680 of the Imam Hussein, the grandson of the Prophet Muhammad.
Khuzestan Province in southern Iran is home to a significant ethnic Arab, Sunni Muslim minority and there have been several incidents of sectarian violence there in recent years.
Also on October 16, five people were killed in a shooting attack on Shi'ite worshippers marking Ashura in Sunni-dominated Saudi Arabia.
An extremist Sunni group took responsibility for that attack.
Based on reporting by Reuters and AFP