U.S.-backed Iraqi forces swept through a central Baghdad slum Sunday, disarming Sunnis from a government-allied paramilitary group to quell a two-day uprising launched to protest the arrest of their leader.

At least four people were killed and 21 wounded in the two days of fighting between government troops and the Awakening Council in Fadhil, a ramshackle warren of narrow, fetid streets on the east side of the Tigris River where al-Qaida once held sway.

The confrontation in Fadhil could be explosive if it leads to a split between the Shiite-led government and the Awakening Councils, made up of Sunnis who abandoned al-Qaida and joined forces with the Americans to fight the insurgents.

Distrust runs deep between the Shiite-led government and the Awakening Councils, which the U.S. calls Sons of Iraq, because many of them are ex-insurgents. There have been fears that some fighters may return to the insurgency if they feel threatened by the government.

That could undermine U.S. plans to remove all combat troops from Baghdad and other cities by the end of June and end the U.S. combat role in Iraq by September 2010.

Members of the Fadhil council said Sunday they decided to give up the fight and hand over their weapons to spare the neighborhood, whose bullet-pocked buildings bore witness to intense combat there two years ago.

Most of the top council members fled the neighborhood as Iraqi troops searched house-to-house, according to residents who spoke on condition of anonymity because they feared for their safety.

Nevertheless, a few fighters were still holding out. An Iraqi patrol, accompanied by an Associated Press photo and video team, came under heavy fire, sending them ducking for cover as bullets sheared off bits of mortar from the buildings lining the narrow alleyway.

Members of the councils maintain that they are being unfairly singled out and targeted by the Shiite-dominated security forces because they are Sunnis. But none of the past arrests drew the kind of explosive reaction that followed Saturday's detention of Adel al-Mashhadani.

"In our view, all these arrests and assassinations ... is part of Iran's plan to dominate Iraq," said Shogaa al-Aazami, commander of an Awakening Council in west Baghdad. "We think the arrests and the assassinations will continue."

Clashes broke out Saturday when Iraqi troops seized al-Mashhadani, accusing him of terrorist activity and leading an armed group loyal to Saddam Hussein's ousted party.

Awakening Council fighters, who a few days earlier had been manning security checkpoints, opened fire on Iraqi troops, setting off gunbattles that persisted into Sunday. U.S. soldiers rushed to support the Iraqis, and U.S. helicopters patrolled above the neighborhood, once notorious as the place where a U.S. contractor's helicopter was shot down in January 2007.

"Why does al-Mashhadani become a terrorist when before they used to consider him a hero," said a member of the Fadhil council, who gave his name only as Abu Abdullah. "We are not going to submit to any terms from the Americans or the Iraqi authorities since we are afraid that they will stab us in the back as they did to our leader."

Col. Bill Buckner, a U.S. military spokesman, said al-Mashhadani was arrested under a December 2008 warrant charging him with seven offenses including extortion, roadside bombings against Iraqi forces, robbery and ties to al-Qaida in Iraq.

Helicopters dropped leaflets over Fadhil with a statement from the Iraqi army's top Baghdad commander asking Council fighters to "take a patriotic stance" and distance themselves "from suspect elements and outlaws."

Iraqi officials sought to dampen fears that the move was part of a plan to disband the Awakening Councils. A government adviser to the councils, Thamir al-Tamimi, told Al-Sharqiyah television that the crisis needed to be contained to avoid "pulling the Awakenings into confrontation with government forces."

Nevertheless, the move against the Fadhil group deepened the suspicion between the Sunnis and the Shiite-led government, which took control of the 90,000 Awakening Council members last October from the Americans.

"We hope the government will not arrest any member until it is proved he made mistakes," said Sheik Mustafa Kamil Shebib, leader of the Awakening Council in south Baghdad's Dora area.

Sheik Aifan Saadoun, a prominent Anbar province Awakening Council member, said no one wants criminals in the ranks but "we fear that this situation will turn into a settling of scores by some political parties and we might be the victims."

Awakening Council leaders have also complained of delays in receiving their salaries since they went off the U.S. payroll last year. U.S. officials blamed the delay on red tape and said salaries 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 government revenues, prompting a freeze on army and police recruiting.

Ahmed Abu Risha, head of the Awakening Councils in Anbar province, said the government should speed up integrating volunteers into the army and police "to avoid what happened today" in Fadhil.

Also Sunday, a roadside bomb exploded near a security patrol in the southern city of Basra, killing one security guard and three civilians, police said.

Britain plans to withdraw its remaining 4,000 troops from the Basra area by July and will hand over responsibility to the U.S. Army this week.

On Sunday, Iraqi commanders thanked Britain for its contribution during a ceremony at a Basra hotel.

"The Iraqi army and the Iraqi public will remember the sacrifice by British forces for some time to come," said Gen. Hawedi Mohammed, commander of Iraqi forces in the city.