US and Iraqi forces have arrested Iraq's deputy health minister at his ministry building in central Baghdad.
Hakim Zamili is a senior member of the political group loyal to Shia cleric Moqtada al-Sadr.
He is suspected of allowing ambulances to be used to smuggle militia weapons.
The raid comes after the US military said a plan to stabilise Baghdad was under way.
Elsewhere in Iraq, police and rescue workers in Iraq say 20 people were killed in this morning's car bomb attack at a vegetable market in a mainly Shia town south of Baghdad.
Another 27 people were wounded in the attack, which happened in Aziziyah, 100km south of the capital.
Authorities imposed a curfew after the blast in Aziziyah and Iraqi police reinforcements from the nearby city of Kut were dispatched, according to police.
Ten people were also killed in a car bombing in a mainly Shia district in eastern Baghdad.
Three charged with corruption in Iraq
Three senior US military officers who have been supervising funds for reconstruction in Iraq have been charged with corruption.
The Reserve officers and two US civilians are accused of steering contracts for reconstruction work towards certain companies in return for bribes.
The bribes included cash, sports cars and jewellery.
The US special Inspector General for Iraq, Stuart Bowen, has vowed to root out waste, fraud and abuse in Iraq.
He said 80 cases are under investigation.
