The US-appointed Iraqi Governing Council has criticised Thursday's raid on the home and party HQ of one of its leading members, Ahmed Chalabi.
Chalabi said armed police roused him from his bed
Council members meeting in Baghdad to discuss Thursday's events blamed the US-led coalition for the raid and said they would seek an explanation.
Speaking after the raids, Mr Chalabi said Iraqi and US personnel took part, seizing papers and computer equipment.
He accused the Americans of trying to discredit him.
But US officials maintain that the Iraqis were responsible for the operation and are handling the investigation.
At least one member of the US-appointed council has threatened to resign over the issue.
Mr Chalabi was once close to the US but has become increasingly distanced.
The council adopted a statement criticising the Coalition Provisional Authority (CPA) for not giving advance notice of the raids and for what it described as the rough behaviour of Iraqi police during the raid.
An official attending the meeting told Reuters news agency that everyone present thought the coalition was behind the raid.
However, the US State Department said earlier the reasons for the operations had been "legal and investigative" rather than political.
A senior official of the US-led coalition occupying Iraq told AP news agency that several people had been arrested on allegations of "fraud, kidnapping and associated matters".
In Washington, US Defence Secretary Donald Rumsfeld said he had not been informed of the raid before it happened.
Mr Chalabi, meanwhile, told the Arab TV station al-Arabiya that he was proud to have become a target of the coalition.
"What the Americans have done earned me a medal from the Iraqi people," he said.
"It invalidated everything that had been said about me being with the Americans, it showed that I was with the Iraqi people all along."
In a BBC interview on Thursday Mr Chalabi said that while he was a friend of the US he believed that the CPA was trying to impose something unworkable on Iraq.
Last year, Mr Chalabi was one of the first Iraqi exiles to be flown back into Iraq following the US-led invasion.
He was seen by Pentagon officials as a possible future president.
As recently as January he was a special guest at President George W Bush's annual State of the Union address.
But since then Mr Chalabi appears to have fallen out with his Washington backers - and not just over his criticisms of the US-led occupation.
There has also been criticism in Washington over Mr Chalabi's alleged links with Iranian hardliners, as well as the quality of intelligence passed to the US by his party, the Iraqi National Congress (INC), in the run-up to the invasion.
The Pentagon recently cut off some $340,000 a month in funding to the INC.