Laith al-Khazali was arrested in March 2007, two months after insurgents wearing U.S.-style uniforms penetrated a government compound in Karbala. One soldier was killed outright, and four others kidnapped and shot.
Ali al-Dabbagh, a spokesman for the Iraqi government, said Khazali was not released Sunday in exchange for the freedom of five British hostages, CNN reported. He described it as a gesture of goodwill to militant Shiite groups.
Khazali and his brother, also arrested in 2007, allegedly belonged to a group, the League of the Righteous or Asaid ahl al-Haq. The U.S. military said the group has claimed responsibility for about 6,000 attacks on coalition forces.
"As security improves and the Iraqi security forces mature, a few Shia extremist groups are now attempting to engage the government of Iraq in the reconciliation process," the military said.