Qasem Muslah, a commander in the state-sponsored Hashed al-Shaabi paramilitary coalition, is the first high-ranking official in the powerful group to have been arrested in relation to a wave of murders of pro-democracy activists and journalists that started in 2019.

A spokesman and other sources within the Hashed said Wednesday evening that Muslah had been released, but the government has yet to confirm the move.

"At dawn in Baghdad, police intelligence arrested Qasem Muslah, Popular Mobilisation Forces (Hashed) operations chief for Anbar province, who gave the order to kill Ihab al-Wazni on May 9 and another activist Fahim al-Taie in December 2019," the security source said.

Anti-government campaigner Wazni was shot dead outside his home by men on motorbikes using a gun equipped with a silencer early on May 9 in the holy shrine city of Karbala, sending protest movement supporters onto the streets to demand an end to such bloodshed and official impunity.

Wazni had for many years criticised Iraqi armed groups and Iran's influence in the country, leading protests in Karbala, where pro-Tehran armed groups hold major sway.

Killings, attempted murder and abductions have targeted more than 70 activists since a protest movement erupted against government corruption and incompetence in 2019.

Authorities have consistently failed to publicly identify or charge the perpetrators of the killings, which have not been claimed.

- 'Show of force' -

Activists have repeatedly blamed Iran-linked armed groups and say the perpetrators are known to security forces but have not been arrested out of fear of Iran, despite government pledges to act.

Directly after Muslah's arrest, security forces barred entry to the high-security Green Zone in the heart of the capital where many embassies and ministries are located.

The Hashed had quickly issued a statement vowing Muslah "would be released in the coming hours" and witnesses said the group deployed armed men and armoured vehicles to the July 14 bridge that crosses the Tigris river into the Green Zone.

The United Nations's top representative in Iraq, Jeanine Hennis-Plasschaert, blasted the move on Twitter.

"Any arrest case should run its course, as goes for any Iraqi. And surely, nobody should resort to a show of force to get their way," she said.

"Such behaviour weakens the Iraqi state and further erodes public trust. State institutions must be respected at all times. Nobody is above the law."

Several thousand people protested in Baghdad on Tuesday to demand justice over the deadly attacks on activists and journalists.

Two protesters were shot dead and 150 people were injured -- the majority security forces -- during the rallies, tweeted Ali al-Bayati, a member of the Iraqi government's human rights commission.

Prime Minister Mustafa al-Kadhemi later vowed to open an investigation "to establish the truth of what happened" at the demonstration.