The kidnapping of five Britons in Baghdad in May took a surprise turn yesterday when the United States military said that it had arrested three men, thought to belong to an Iranian-backed militant group, suspected of masterminding the attack.

The arrests took place in Sadr City, a Shia stronghold in Baghdad, before dawn on Saturday. The British Embassy in Baghdad had no immediate comment on the incident.

There was still no word on the fate of the British hostages, four security guards and a computer expert, seized from a Finance Ministry compound on May 29.

The US military said that the detained men were believed to be members of an Iranian-backed “special group” – the name given to rogue elements that have broken away from the al-Mahdi Army militia, which is loyal to Hojatoleslam Moqtada al-Sadr, the Shia cleric.

In a second surprise development over the weekend, Hojatoleslam al-Sadr and another of Iraq’s most powerful Shia leaders, Abdul Aziz al-Hakim, who heads the Supreme Council for the Islamic Revolution, agreed to end months of hostility, which had raised concerns about escalating Shia-on-Shia violence.

Mr al-Hakim, who heads the Supreme Council for the Islamic Revolution in Iraq, promised on Saturday to enhance cooperation between his party and the Sadrists as part of the three-point deal.

A truce between the Mahdi Army and the Badr brigade, the militant wing of Mr Hakim’s party, could have a huge calming effect in the oil-rich south of Iraq. The rival militias have a long record of conflict that has sparked frequent clashes and targeted assassinations in the aftermath of the March 2003 invasion. In late August, running street battles erupted between the two sides at a major Shia festival in the holy city of Karbala, killing at least 52 people and wounding up to 300.

The violence prompted Moqtada al-Sadr to order a freeze of his militia activities for up to six months to allow for its restructuring. It is unclear how much control the youthful cleric maintains over his fighters.

— The military interventions in Afghanistan and Iraq have strengthened al-Qaeda, according to a study (Greg Hurst writes). The report on the War on Terror, by the academic Paul Rogers and published by the Oxford Research Group, claims that the removal of the Taleban regime gave al-Qaeda propaganda, as did rows over the detention of suspects and “extraordinary rendition”. The report calls for British and US troops to be pulled out of Iraq and says that war with Iran must be avoided.

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