"Daesh executed 16 Haditha traders last night," the mayor of the city, Abdelhakim al-Jughaifi, told AFP by phone.
"The victims were transporting mostly food goods, such as vegetables, from Baiji to Haditha," he said.
Baiji, which lies on the Tigris about 200 kilometers (125 miles) north of Baghdad, is under IS control.
Haditha, which sits on the Euphrates about 130 kilometers (80 miles) southwest, is the last major city in the province of Anbar still under government control.
"They were stopped at a checkpoint and abducted," the mayor said.
"They then executed them, some by shooting them, others by slitting their throats."
He said Haditha residents found the bodies on the road and were able to bring them back.
A police lieutenant colonel confirmed the 16 executions. The victims were buried on Sunday, several sources said.
Abu Maath al-Jughaifi, a tribal fighter from Haditha, said a paper was found on one of the bodies in which IS said the executions were to avenge the deaths of jihadist fighters during a recent battle near Haditha.
According to government sources, at least 23 IS militants were killed in clashes in Khasfa last week, including two French nationals who drove suicide truck bombs.
Haditha is isolated in Anbar, where IS controls the border with Syria to the west and most of the land to the east, including the provincial capital Ramadi, which they seized on May 17.
According to residents, a bag of 50 kilos of flour fetches $900 in Haditha when it only costs $20 to $30 in Baghdad.
IS has allowed some trade to continue between the regions it controls and government areas but drivers generally have to pay a fee.
source: Reuters