QUETTA, Pakistan (Reuters) - More than 20 people have died and 120 were wounded after suspected Sunni Muslim extremists attacked rival Shi'ites with automatic rifles and grenades in southwestern Pakistan, officials say.

In a separate incident on Tuesday, a provincial leader of an outlawed Shi'ite group was gunned down and more than 30 Shi'ites were wounded in a clash with majority Sunnis, police said.

The violence in Pakistan came as almost 150 people were killed in bomb attacks in Iraq's holy Shi'ite city of Kerbala and in the capital Baghdad during processions to mark the seventh century slaying of Hussein, grandson of the Prophet Mohammad.

The attack in the centre of the Pakistani city of Quetta came as a Shi'ite procession was passing through. Explosions and fierce gunfire were heard throughout the city.

"Terrorists started firing from a balcony on the participants of the procession," Riaz Khan, police deputy inspector general, told Reuters.

He said armed men belonging to the Shi'ite Muslim Hazara community returned fire.

"When the terrorists saw themselves surrounded, at least two of them blew themselves up," he said. "I saw their bodies dangling from the balcony over the electricity wires."

Another police officer said the attackers had thrown hand grenades during the attack.

"So far the information is more than 20 were killed and more than 120 injured, some of them seriously," said a federal government official, who did not want to be named.

An official at the city's main hospital said there were nine dead there and 35 wounded. An official at the military hospital said it had "a lot of casualties", including some dead, but declined to give details.

SHI'ITES RAMPAGE, BURN SHOPS

Shi'ites immediately went on the rampage, burning more than 50 shops in Quetta. Authorities sent in troops to restore order and imposed a curfew soon after.

The Shi'ite mourning period of Muharram has been marked in the past by violence between Shi'ites and Sunni Muslims and security has been tight throughout Pakistan ahead of Tuesday's anniversary.

A witness in Quetta saw many Shi'ites rioting just outside his house. "They have burnt a hotel and now the army is in the area," he said.

Police ordered people into their homes as a huge plume of smoke rose from a main market. "Do not come out, a curfew has been imposed," they warned over loudspeakers.

In Mandi Bahauddin, a town more than 600 km (375 miles) northeast of Quetta, Ejaz Hussain Naqvi, provincial vice president of the outlawed Shi'ite group Tahreek-e-Jafria Pakistan, was attacked and shot dead by a Sunni mob, a Shi'ite official said.

Hundreds of people have died in violence between Sunni and Shi'ites in Pakistan in recent years.

Tuesday's was the worst outbreak of sectarian violence in Pakistan since a suicide attack on a Shi'ite mosque in Quetta last July that killed more than 50 people.

On Saturday, a suicide bomber blew himself up in a Shi'ite mosque in the city of Rawalpindi, slightly wounding three people, officials and witnesses said.