The blast in a parking lot was near the Imam Ali shrine, which Shiites believe houses the tomb of the Prophet Mohammed's cousin and son-in-law, CNN said. Najaf also is the home to Grand Ayatollah Ali Sistani, the most powerful Shiite cleric in Iraq.
Several other vehicles were destroyed in the explosion, and local officials imposed a citywide curfew.
In Baghdad, officials announced the arrest of the prime suspect in the kidnapping of Italian journalist Guiliana Sgrena in 2005, who was held for a month before being freed.
Muhammed Hila Hammad Ubaydi was captured March 7, but the announcement of his capture was delayed until DNA testing could verify his identity, the military said. Ubaydi also is a prime suspect in the kidnappings and killings of several other hostages in Iraq, CNN said.