The number of dead has been put at 12 with eight injured. The extent of their injuries are not known.
The terrorists, believed to be ISIS members, fled and are yet to be captured. All the victims, said to be aged between 18 and 30, are thought to be Iraqi nationals.
The layers attack comes after a similar attack two weeks ago when a group of ISIS terrorists armed with AK-47s attacked the headquarters of a Real Madrid Supporters Club in Balad near Baquba.
Most of the victims were Real Madrid fans but cafe staff and other customers were also killed with 20 people injured.
ISIS later claimed responsibility as gruesome pictures and video emerged of the bloodbath.
Real Madrid president, Florentino Perez dedicated the win to the fans who lost their lives in that massacre before news of the latest attack emerged.
He told a Spanish television channel: 'I would like to dedicate this cup to our fans in Iraq.'
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