"The Iraqi national intelligence service, in coordination with Baghdad and Diyala security forces, carried out an operation which resulted in the arrest of 40 members of varying rank," a statement said.
Diyala is a province just northeast of the capital where IS has not had fixed positions in almost a year but has carried out several deadly suicide car bombings.
"Many bombs, suicide belts and cars used by the terrorists were seized, as well as large amounts of money they used to fund their criminal activities," the statement said.
The swoop was the continuation of an operation that had already resulted in more than 30 arrests and the dismantling of a car bomb-making cell in Baghdad in March.
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