U.S. troops were waiting at the Baghdad International Airport for Ali Faisal Lami, an associate of Ahmed Chalabi, to climb down from his plane and when he did, they grabbed him. The allegations are serious: leading Iranian-backed cells of Muqtada Sadr's Mahdi Army and organizing a June bombing in Sadr city that killed four Americans and six Iraqis.

A possible break in the investigation of one of the year's most notorious acts of violence also marks another plunge in relations between America and Chalabi, the one-time Iraqi exile and Pentagon favorite who was a leading proponent of the invasion to topple Saddam Hussein in 2003. The arrest occurred Wednesday morning and was not announced by the military until late last night – without identifying the target by name. By Thursday morning word started to seep out and Iraqi officials, asking not to be named because they are not authorized to speak publicly, confirmed that it was Lami. According to one account from an Iraqi security official, U.S. soldiers met Lami's plane and calmly pulled him aside, confiscating his luggage including a laptop computer. He was traveling from Beirut with his family.

Lami, a Shiite, holds a high rank in Iraq's controversial DeBaathification Commission, which carried out widespread purges of Sunnis from government jobs and has now been frozen by new legislation. The committee is headed by Chalabi, who issued an adamant defense Thursday, demanding that Lami be released with an apology from his American captors. "This act by the Coalition Forces affirms again the importance of finding a solution for the random arrests of Iraqis by U.S. forces which are ignoring the rights of Iraqi citizens," Chalabi said in the statement. He credited Lami with opposing Saddam's repression and said he had helped negotiate an end to fighting between Sadr forces and U.S. troops in Najaf in 2004.

Lami apparently joined Chalabi at the DeBaathification Commission after working for a Shiite tribal leader on the Iraqi Governing Council, established by the U.S. occupation in 2003. An Iraqi familiar with the commission said Lami is a close aide who also does outreach for Chalabi in Baghdad's Sadr City, a stronghold for the Sadr militia. An Iraqi official told Newsweek that U.S. or Iraqi troops had arrested one of Lami's bodyguards recently in Sadr City.

Chalabi has slipped in and out of favor with American leadership since the invasion. Intelligence sources have accused him in the past of being too cozy with Iranian contacts – though the allegations have not been proven and would hinge on some fine distinctions in a country where leaders frequently meet with their Iranian neighbors. After helping Chalabi lead his own militia force into Baghdad in 2003, U.S. officials ended up raiding his compound a year later, reportedly because of links to Iran. Though his party failed to win a seat in 2005 parliamentary elections, Chalabi seemed to have rehabilitated himself with the Americans and won influential economic and trouble-shooting posts from the Iraqi leadership. But Newsweek reported in May that Iraqi Prime Minister Nuri al-Maliki had stripped him of a post coordinating infrastructure projects, again in part because of flirtations with elements from Tehran. Chalabi's office denied he was fired and has consistently denied that he has passed on secrets or made inappropriate contacts with Iranians.

With reporting from Hassan al-Jarrah, Yassar Ghani and Ahmed Obaidi