By Agence France-Presse
There have been periodic bomb attacks in Damascus, but the stronghold of the regime of President Bashar al-Assad has been largely spared the destruction faced by other major cities in six years of civil war.
A roadside bomb detonated as a bus passed and a suicide bomber blew himself up in the Bab al-Saghir area, which houses several Shiite mausoleums that draw pilgrims from around the world, the Syrian Observatory for Human Rights said.
"There are also dozens of people wounded, some of them in a serious condition," Observatory chief Rami Abdel Rahman told AFP.
State television said there were 40 dead and 120 wounded after "terrorists detonated two bombs."
It broadcast footage of several white buses with their windows shattered, some of them heavily charred.
Shoes, glasses and wheelchairs laid scattered on the ground covered in blood.
Syrian Interior Minister Mohammad Shaar said the attack targeted "pilgrims of various Arab nationalities."
"The sole aim was to kill," he said.
The Iraqi foreign ministry said around 40 of its nationals were among the dead and 120 among the wounded.
There was no immediate claim for the attack.
Shiite shrines are a frequent target of attack for Sunni extremists of Al-Qaeda and the Islamic State group (IS), not only in Syria but also in neighbouring Iraq.
The Sayeda Zeinab mausoleum to the south of Damascus, Syria's most visited Shiite pilgrimage site, has been hit by several deadly bombings during the six-year-old civil war.
Twin suicide bombings in the high-security Kafr Sousa district of the capital in January killed 10 people, eight of them soldiers.