Armed men in military-style uniforms seized 100 people from a ministry in broad daylight on Tuesday, stinging the Iraqi government into detaining five police chiefs.
The raid on a higher education ministry building in a normally peaceful area of the capital came as Prime Minister Nuri al-Maliki faced growing criticism from his US backers for not doing do more to rein in Shia militias with alleged links to the security forces.
The hostages seized from the ministry's scientific research institute in the middle-class neighbourhood of Karrada included visitors as well as staff, in one of the largest mass abductions of Iraq's sectarian dirty war.
"A large force arrived with many vehicles with tinted windows claiming to be police commandos and they clashed with the guards and then entered the building and snatched all the employees and some visitors," Higher Education Minister Abed Dhiab al-Ujaili said.
He went on state television to describe the incident as a "terrorist act where some 100 employees and ordinary people were kidnapped."
Three of those kidnapped were later released unharmed behind a Baghdad hospital, a medic told AFP.
"A pickup truck dropped them off behind the hospital," said the witness who works at Al-Kindi hospital in central Baghdad. "They were blindfolded with tape and were very confused and had no money."
The higher education ministry is controlled by the National Concord Front, the Sunni Arab faction in Iraq's Shia-led national unity government, and the authorities swiftly announced that five police commanders had been arrested over the kidnappings.
Interior ministry spokesman Major General Abdul Karim Khalaf told AFP the five "should be held responsible".
State television said a special committee has also been set up to find the hostages.
The minister said academics were becoming a favoured target for the men of violence and predicted that lecturers would down tools.
"They are targeting higher education to empty it," Ujaili said.
But ministry spokesman Basil al-Khateeb later announced that a strike had been averted after the interior ministry gave assurances that police would provide extra protection around campuses.
The disguising of the daylight raid as a commando operation fanned Sunni Arab fears of security service connivance with Shia militias connected to the powerful religious parties that lead the government.
On Monday night, US forces clashed with militias in the Shia neighbourhood of Shuala, as US Central Command chief General John Abizaid met the Iraqi prime minister with government policy towards the militias high on the agenda.
National Security Advisor Muwaffaq al-Rubaie confirmed the issue had been discussed but denied reports that the US commander had demanded tougher action.
"There is no imposition of the US military on the Iraqi government, we work with the multinational forces in the spirit of partnership," Rubaie told AFP.
Maliki has previously ordered US commanders to rein in planned operations against Shia militia strongholds, including a proposed assault on Sadr City, Baghdad's most populous Shia neighbourhood, where militiamen were believed to be holding an abducted US soldier.
More than 40 people were killed in other violence on Tuesday, 10 of them in a car-bomb attack on Baghdad's busy Shorja market.
Gunmen killed 11 civilians in a series of drive-by shootings in the main northern city of Mosul, while seven people were killed in an ambush in the confessional mixed province of Diyala, north-east of Baghdad, police said.
In the Sunni Arab insurgent of Ramadi, west of the capital, medics said they had received the bodies of 32 people who had been killed by US shelling.
But a US officer in the city denied that the dead were civilians, saying they had been killed in clashes sparked when insurgents planted a bomb.