Syria handed over a highly wanted half-brother of Saddam Hussein who is suspected of funding and planning the post-war insurgency, Iraqi sources say.
Iraq's government announced the capture of the former Saddam Hussein aide Sabawi Ibrahim al-Hasan al-Tikriti.
Iraq did not comment on Syria's role but the Iraqi sources said Damascus had acted under international pressure.
Damascus has been accused of having links to attacks in Lebanon and Israel as well as harbouring Iraqi rebels.
"The Syrian authorities, because of the tremendous pressure on them, did something about Ibrahim," a source described as a "senior government official" told Reuters news agency on condition of anonymity in Baghdad.
"Having so many problems on their plate at the moment, the Syrians were willing partners in this, but the Americans and we were also involved."
BBC correspondent Jim Muir notes the Iraqi government is neither confirming nor denying the reports for now.
If Syria has indeed handed him over, he adds, it could represent a major climbdown by Damascus which has consistently claimed that such people are not operating from its soil.
'Climbdown'
Thair al-Naqib, a spokesman for the Iraqi government, said Mr Tikriti had been arrested "on the Syrian-Iraqi borders".
Speaking to Arabic TV channel al-Arabiya, he added that details of the capture would be released to the media "soon".
Damascus appears to have tightened its border controls in recent weeks after accusations that militants were using them to cross into Iraq.
Syria has been accused by Israel of involvement in a suicide bomb attack in Tel Aviv on Friday - the first since the Israeli-Palestinian truce reached on 8 February.
It denied any link but closed down the Damascus office of Palestinian militant group Islamic Jihad after it claimed responsibility.
The US and France have led calls for Syria to pull its 15,000 troops out of Lebanon following the assassination of former Prime Minister Rafik Hariri.
Washington recalled its ambassador from Damascus and Secretary of State Condoleezza Rice said that while she did not blame the attack on Syria, its presence in Lebanon was destabilising.
Extradition call
Mr Tikriti, a maternal half-brother of Saddam Hussein, was number 36 on the list of wanted former Baathist officials issued by the Americans after the 2003 invasion.
Interim Prime Minister Iyad Allawi's office said he had "killed and tortured Iraqi people" and accused him of "planning, supervising and carrying out many terrorist acts in Iraq".
Mr Tikriti was head of the Saddam regime's intelligence services during the 1991 Gulf War, and then chief of general security until 1996 before becoming a presidential adviser.
Just last month Iraqi government officials named him as one of a group of former regime figures they said were directing and financing insurgency operations in Iraq from bases inside Syria.
They had asked the Syrians to extradite him and others.
His brothers Watban and Barzan are already being held at a US facility outside Baghdad and are expected to be tried in the next few months at a special tribunal.What I do is kick them in the pants with a diamond buckled shoe!
~~Aileen Mehle~~
