The incident, which will likely to add to the nation's sectarian tensions, also left one Iraqi soldier dead.
The arrested lawmaker, Ahmed al-Alwani, has been prominent among the organisers of Sunni protests against Iraq's Shiite-led government over the past year. He is sought on terrorism charges for inciting violence against Shiites who came to power after the 2003 US-led invasion that ended Saddam Hussein's Sunni-led regime.
As military and security forces arrived at his home at dawn today in the western city of Ramadi, al-Alwani's guards and tribesmen opened fire, prompting a shootout that lasted nearly an hour, a police officer said. A spokesman of Iraq's counter-terrorism forces, Sameer al-Showaili, told the state TV that al-Alwani surrendered after he ran out of ammunition.
Al-Alwani's parliamentary bloc, Iraqiya, demanded his release and denounced the arrest as politically-motivated, saying it was intended to benefit the bloc's rivals in next year's national elections.
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"The arrest of al-Alwani and the assassination of his brother are part of a campaign for the elections," said Sunni lawmaker, Salman al-Jumaili, who heads the bloc in the parliament. He said the Shiite-led government is "agitating sectarian tension regardless of the consequences on the future of the country."
Al-Alwani's arrest comes a year after several bodyguards of Finance Minister Rafia al-Issawi, a Sunni, were arrested in a terrorism-related sweep, and two years after authorities issued an arrest warrant against Sunni Vice President Tariq al-Hashemi, also on terrorism charges.