US forces have arrested the Iraqi who declared himself mayor of Baghdad 10 days ago.
A US military statement said Mohammed Mohsen Zubaidi, was removed from the Iraqi capital for trying to run it without their authority.
The move comes on the eve of a meeting in Baghdad to discuss the formation of a new Iraqi government.
The US military also reported that it had detained General Hussam Mohammad Amin, a key figure in negotiations with the United Nations weapons inspectors before the war.
Chemicals found
Earlier, the US defence department has confirmed that its troops in Iraq have found drums containing chemicals whose nature has yet to be determined.
An American news report claimed that 14 unmarked barrels, at least a dozen missiles and 150 gas masks were found at a the site, 112 miles northwest of Baghdad.
However, the Pentagon has urged caution, saying the material found would have to be sent to the US for testing before any conclusions were drawn.
Rumseld visiting Gulf
US Defence Secretary, Donald Rumsfeld, arrived in the United Arab Emirates at the start of a week long tour of the Gulf.
Mr Rumsfeld landed in Abu Dhabi six hours late after his aircraft suffered a mechanical problem on a refuelling stop in Shannon.
The delay has forced Mr Rumsfeld to cancel a visit today to Afghanistan but US officials said he hoped to go to Kabul later in the week.
Speaking in Shannon, Mr Rumsfeld told reporters that long, dangerous and difficult work remains in both Iraq and Afghanistan.
The retired general who has been put in charge of rebuilding Iraq, Jay Garner, is to meet the country's leading political, religious and ethnic figures in Baghdad tomorrow to discuss the formation of a new Iraqi government.
The gathering follows an initial meeting near the southern city of Nassiriya almost two weeks ago.
