BAGHDAD -- A gunfight erupted Saturday in central Baghdad after the local leader of a Sunni group that broke with al-Qaida was arrested for his alleged role in terrorist acts, Iraqi officials said.
Adil al-Mashhadani, the head of an Awakening Council group, was detained Saturday along with an aide after a warrant was issued for his arrest, Iraqi military spokesman Maj. Gen. Qassim al-Moussawi said.
The shootout began after Iraqi army and police units served the warrant in Fadhil, a Sunni enclave on the east bank of the Tigris River that was run by al-Qaida until U.S. and Iraqi soldiers regained control in 2007.
Four people -- three civilians and a policeman -- were killed, and 10 people were wounded in the shooting, according to police and hospital officials. They spoke on condition of anonymity because they were not supposed to release information to media.
A Fadhil resident said by telephone that the neighborhood was quiet Saturday night, with Iraqi troops sealing off the area and U.S. helicopters patrolling overhead. He spoke on condition of anonymity because of fears for his own safety.
It was unclear whether the allegations against al-Mashhadani were based on his purported activities before the Sunni revolt against al-Qaida, during which thousands of Sunnis switched sides.
A U.S. military spokesman, Col. Bill Buckner, confirmed the arrest and said the move was not directed at the Awakening Council.
The rise of such volunteer groups, also known as Sons of Iraq, is widely seen as a major contribution to the sharp reduction in violence following the U.S. troop surge of 2007.
Volunteer fighters, many of them ex-insurgents, man checkpoints, provide intelligence to Iraqi and U.S. forces and take part in joint security patrols.
How the Shiite-led government deals with the Sunni security volunteers is widely seen as a test of its ability to win the loyalty of disaffected Sunnis -- an essential step in forging a lasting peace in Iraq.
Many Shiite politicians view the councils with deep suspicion, believing they switched sides for money and could turn their weapons against the majority Shiite community again someday.
Last October, the Iraqi government assumed responsibility for paying the more than 90,000 security volunteers. The Iraqi government is to start paying the last 10,000 volunteers still on the U.S. payroll April 1.
On Saturday, however, leaders of several Awakening Council groups complained that the government has not paid them in months, with some threatening to quit a movement.
"We have not received our salaries in two months," said Ahmed Suleiman al-Jubouri, a leader of a group that mans checkpoints in south Baghdad. "We will wait until the end of April, and if the government does not pay us our salaries, then we will abandon our work."
Similar complaints were also raised by Sons of Iraq groups in Azamiyah, a former al-Qaida stronghold in north Baghdad, and in Diyala province near the capital.
"The fighters in Diyala haven't been getting paid since three months ago," said Khalid Khudhair al-Lehaibi, leader of the volunteers in the province. "We appeal the government to pay our salaries, and if they won't, we will organize demonstrations and sit-ins in the province."
Efforts to contact a government spokesman were unsuccessful because offices are closed on weekends.
Buckner said the new budget law shifted funding for the volunteers to the Interior Ministry, which was still refining its procedures. He said payments would resume this week.
Under pressure from the U.S., the government agreed to accept 20,000 of the fighters into the police or army and continue paying the rest until they could find them civilian jobs.
But U.S. officials say the process has been slowed because the drop in world oil prices has cut deeply into the government's revenue, prompting a freeze on army and police recruiting.
Also Saturday, a senior aide to Prime Minister Nouri al-Maliki confirmed that contacts were under way to win the release of five Britons taken hostage in May 2007 but denied Arab media reports that deal had been finalized.
The widely read Saudi-owned news website Elaph quoted a leader of the Shiite extremist group Asaib Ahl al-Haq, or League of the Righteous, as saying one of the five Britons would be freed "very soon" in exchange for 10 of its members.
If that exchange goes according to plan, the other hostages would be released in stages in exchange for the freedom of more detained Shiites. The first group of detainees would include Laith al-Khazali, brother of the league's founder, Qais al-Khazali, Elaph said.
The final exchange would free Peter Moore, an information technology consultant, in exchange for Qais al-Khazali and Ali Moussa Daqduq, a Lebanese Hezbollah commander who was captured in Iraq in 2007, the Web site reported.
Moore and four of his security guards were seized by gunmen in police uniforms from the Finance Ministry.
Last week, the British Embassy confirmed receiving a hostage video but refused to say who appeared on it. The BBC said it was Moore, who had appeared in an earlier video shown on Feb. 26, 2008.
The league is a splinter group from the Mahdi Army militia loyal to radical Shiite leader Muqtada al-Sadr. The U.S. believes the group is backed by Iran, a charge the Iranians deny.
Qais al-Khazali, a Shiite cleric and former aide to al-Sadr, has been in U.S. custody since March 2007. U.S. officials believe al-Khazali's group launched a January 2007 raid on a government compound in Karbala, that killed five U.S. soldiers.