He commanded the Iranian-backed Kataib Hezbollah group, blamed by Washington for a rocket attack that killed a United States civilian contractor in northern Iraq last Friday.
Tens of thousands of people marched in Baghdad on Saturday to mourn Iran's military chief Qassem Soleimani and Iraqi militia leader Abu Mahdi al-Muhandis, killed in a US airstrike that has raised the spectre of wider conflict in the Middle East.
The US-led coalition fighting the Islamic State armed group in the region said on Saturday it did not conduct air strikes near Camp Taji.
Iraq's prime minister, Adel Abdel Mahdi, is also attending the ceremony.
Iraqi military added in their statement that there was "no loss of life".
Sirens rang out at the USA compound, sources there told AFP. Protesters have also taken to the streets of Tehran to condemn the Pentagon's assassination of the Islamic Revolutionary Guard general.
Tens of thousands of people turned out in the streets of Baghdad, near the high-security Green Zone, for Saturday's funeral procession.
Tehran has already named Soleimani's deputy, Esmail Qaani, to succeed him.
Numerous mourners were reportedly militia members donning their military fatigues, and anti-American and anti-Israel chants could be heard coming from the crowd. "I do not believe the US took an action to stop a war because the plan for the assassination of General Soleimani was in the making for quite some time". Declaring three days of mourning across the country, Iran's supreme leader Ayatollah Ali Khamenei vowed to take "severe revenge" for Soleimani´s death.
The Associated Press previously reported that 3,000 of the deployed troops are from the 82nd Airborne Division at Fort Bragg. Security sources told news agency AFP that surveillance drones were sent out above the base to locate the source of the rockets.
"Under Soleimani, Iran has become the single most destabilizing force in the Middle East and an exporter of tyranny throughout the region".