"(After the killings) some people began to congratulate each other. The police didn't intervene at all. The people had to go in and bring the bodies to the police."
Residents said the attack happened when a Shi'ite dignitary visited the home of the victims during a religious festival.
The victims were forced out of the building which was ransacked and set alight by the mob.
The Sunni Islamist Muslim Brotherhood which dominates the country's government on Monday condemned the bloodshed.