The bus, travelling from Qom to Mashhad, overturned on the road between Shahrood and Sabzevar in the northeastern province of Khorasan Razavi.
Mehdi Salmanian, a medical official in Sabzevar, said 7 people were killed and 22 other injured in the accident.
He added that 13 ambulances took the injured to nearby hospitals.
Some of them were treated and discharged while a number of others are still in hospitals, some in ICU, he went on to say.
More than 1.7 million Iraqi pilgrims and tourists travel to Iran annually, according to some reports.
They mostly visit the Shia holy cities of Qom and Mashhad.