After detonating the bomb then opening fire on crowds, the gunmen holed up in the shopping centre in the Baghdad al-Jadida district, amid fears they were wearing suicide belts.
However, Iraqi commandos landed on the roof, where they clashed with attackers inside, killing two and arresting another four.
ISIS has now claimed responsibility for the attack, which would mark a step up in coordination for an attack in Baghdad, which ISIS has previously only subjected to crude suicide bombings.
A police official said the attackers entered the mall and when security forces got too close, they killed three hostages.
He described the mall as a building of four or five floors in a busy commercial area of Baghdad, in a populous Shiite-majority area on the eastern edge of the Iraqi capital. Read more on dailymail.