Police found the tortured, blindfolded bodies of 33 men scattered across the capital and the US-led coalition reported combat deaths of seven servicemen, a day after Iraqi leaders said the capture of a top terror suspect would reduce violence.
Iraqi soldiers also clashed on Monday with gunmen near the holy city of Karbala during an operation to secure the area ahead of a religious festival on Saturday, leaving 14 gunmen and one soldier dead, the Prime Minister's office said.
Kidnappers also dragged off a popular soccer star in Baghdad, while a security crackdown in the city expanded into the upscale Mansour neighbourhood.
An Al-Qaeda-affiliated group dismissed the Iraqi government's claim that the organisation's second most important leader had been arrested, suggesting the man was not a senior figure and denying the terror group had suffered a significant blow.
On Sunday, Iraq's national security adviser announced the arrest of Hamed Jumaa Farid al-Saeedi, also known as Abu Humam or Abu Rana, and said that he had left Al-Qaida in Iraq suffering a "serious leadership crisis".
But the Mujahedeen Shura Council, an umbrella organisation of Sunni Arab extremist groups that includes Al-Qaeda in Iraq, issued a statement on Monday saying its "leadership was in the best condition".
The statement did not directly deny the arrest, or say what position Al-Saeedi held, although it suggested he was not the No 2 leader.
The security adviser, Mouwafak Al-Rubaie, described Al-Saeedi as the second most important Al-Qaeda in Iraq figure behind Abu Ayyub al-Masri, who is believed to have taken over the group after Abu Musab al-Zarqawi was killed by a US airstrike in June. Al-Saeedi was involved in the Feb 22 bombing of a Shiite shrine in Samarra, Al-Rubaie said. The attack inflamed tensions between Shiite and Sunni Muslims and set off reprisal killings that have killed hundreds of Iraqis, like those found in Baghdad on Monday. Police said the 33 bullet-riddled bodies showed signs of torture and had their hands and feet bound. The men had been dumped around several neighbourhoods, police said.
Two other bodies were found dumped on a highway in Kut, 100 miles (161 kilometers) southeast of Baghdad. Both had been shot in the head and chest, said Maamoun Ajil al-Robaiei at Kut hospital's morgue.
The Mujahedeen Shura Council's statement also said insurgents have been inflicting heavy losses on US troops in western Anbar province and in Baghdad.
The US-led coalition said seven of its personnel had been killed in the past two days—five Americans and two Britons. On Sunday, two US Marines were killed in Anbar and two Army soldiers died from roadside bombs in Mosul, 225 miles (362 kilometers) northwest of Baghdad, and near Baqouba, 35 miles (56 kilometers) northeast of the capital. Another soldier was killed on Monday by a roadside bomb. A sixth American died of non-combat injuries, the military said.
In the south, a roadside bomb killed two British soldiers and seriously wounded a third north of the southern city of Basra, a British military spokesman, Maj Charlie Burbridge, said. British Foreign Secretary Margaret Beckett arrived in the capital on Monday on an unannounced visit—her first to Iraq since taking up the post in May.
"We do not underestimate the challenges ahead," Beckett said in a statement. "But we must not forget the progress made in the last twelve months in bringing the first democratically elected national unity government to the country, with a constitution voted for by the people."
South of the capital, Iraqi soldiers clashed with gunmen near the holy city of Karbala during an operation to secure the city ahead of a Shiite religious festival, the Prime Minister's office said. Tens of thousands of Shiite pilgrims are expected in Karbala, 50 miles (80 kilometers) south of the capital on Saturday to observe Shaaban, a mid-month religious celebration.
Fourteen gunmen were killed and another 22 were arrested, while one Iraqi soldier was also killed and another was wounded, the statement said.
On Saturday, police said 13 Pakistani and Indian Shiite pilgrims and their Iraqi driver had been ambushed and killed on their way to Karbala.
Assailants abducted Ghanim Ghudayer, a soccer star and member of Iraq's Olympic team. Considered one of the best players on Baghdad's Air Force Club, the 22-year-old was taken on Sunday evening by unknown assailants, some of whom were wearing military uniforms, police said.
The US-led coalition said the Iraqi army had begun searching the capital's Mansour district as part of a crackdown aimed at tackling violence in Baghdad neighbourhood by neighbourhood. US soldiers would "observe and advise" during the operation, the military said.
The coalition also said five suspected insurgents and a child were killed and a second child was wounded during a raid in Muqdadiyah, about 60 miles (96 kilometers) north of Baghdad. The raid targeted "an individual with ties to movement of terrorist finances and foreign fighters into Iraq," the military said in a statement.
The Iraqi Defense Ministry said that over the previous 24 hours, its troops had killed 15 people suspected of involvement of insurgent activities. Iraqi police said clashes between gunmen and Iraqi forces in Musayyib, 40 miles (64 kilometers) south of Baghdad, resulted in the death of an Iraqi soldier and the arrest of about 100 gunmen.
Disagreements continued over the handover of Iraq's armed forces command from the US-led coalition to the Iraqi government, and the Defense Ministry said a ceremony to mark the transition had been postponed indefinitely.
The two sides still need "to complete some legal and protocol procedures that will lead to a complete understanding between the Iraqi government and the multinational troops," the ministry said. Handing over control from the coalition to Iraqi authorities is a key part of any eventual drawdown of US troops in the country.