Contradictory accounts are emerging of a bloody day-long battle that took place on Sunday near the southern Iraqi city of Najaf.
By Roger Hardy
BBC Arabic Affairs analyst
Iraqi officials say 263 members of a shadowy messianic cult - which calls itself the Soldiers of Heaven - were killed in fierce fighting near the city, which is Holy to Shia Muslims.
According to the official account the clash involved a well-armed group, a charismatic leader and an audacious plot to attack a holy city and kill its religious leaders.
Iraqi officials say this is Shia cult leader Abdul-Zahra
If a novelist had invented the story of the Soldiers of Heaven, it might have been dismissed as a dark fantasy.
This account has its puzzles and inconsistencies.
A young Shia leader, Dia Abdul-Zahra, had apparently gathered hundreds of his followers, including women and children, in an encampment a few miles north of Najaf.
They were well armed and had come to believe that Abdul-Zahra - also known as Ahmed Hassan al-Yamani and Samer Abu Kamar - was the Mahdi.
According to Shia belief, the Mahdi is a Muslim messiah who disappeared hundreds of years ago and whose return will usher in an era of peace and justice before the end of time.
Abdul-Zahra and his followers regarded the religious leadership in Najaf as illegitimate.
Target? Ayatollah Sistani is a leading player in post-Saddam Iraq
Iraqi officials say their extraordinary plan was to enter the city in the garb of pilgrims, declare that the Mahdi had returned, and assassinate Ayatollah Sistani and other senior clerics.
All this was to happen on Ashura, the holiest day in the Shia calendar.
Instead, the Iraqi authorities seem to have had a tip-off. According to their account, they attacked the encampment and foiled the plot.
Some 263 of the Soldiers of Heaven were killed. Officials insist these included the group's leader, and news agency pictures show a dead man closely resembling him.
Among those captured were Sunnis as well as Shia and foreign fighters as well as Iraqis.
Iraqi officials have claimed the group had links with the militant jihadists of al-Qaeda.
Given that Sunni jihadists are fiercely anti-Shia, this seems unlikely.
These prisoners were taken after reported clashes with the Soldiers of Heaven group
They also say the group was working with former Baathists.
It seems the former Iraqi ruler Saddam Hussein did try to use a Mahdist faction as a weapon against the traditional religious leadership in Najaf, whom he saw as a threat.
Whether those links survived the fall of Saddam is not clear.
Iraq's Shia-led government may have an interest in promoting the idea of such an unholy alliance.
It may want to deflect attention from the embarrassing fact that the majority Shia community is riven with factions and divisions.
The authorities may also have exaggerated their own military success.
The signs are that they underestimated the strength of the Soldiers of Heaven and had to call for urgent American air support.
The official version of events has not gone unchallenged.
According to accounts on an Iraqi website and in the British newspaper The Independent, the drama began with a clash between an Iraqi tribe on a pilgrimage to Najaf and an Iraqi army checkpoint.
The fighting escalated, army commanders called for reinforcements, and US aircraft launched an intense aerial bombardment - with significant loss of life.
According to this account, the involvement of the Soldiers of Heaven appears to have been accidental.
History of the Mahdi
There are both Sunni and Shia versions of the Mahdi tradition.
Throughout Islamic history, Muslim leaders have risen up in rebellion claiming to be the Mahdi or to be acting in his name.
Dangerous times for Iraq and the Shia
Britain's General Gordon was killed in Sudan in 1885 during a Mahdist insurrection.
In Saudi Arabia in 1979, Sunni militants took over the Great Mosque in Mecca, claiming the Mahdi had returned.
But Shia attachment to the Mahdi tradition is particularly potent.
One of the most powerful Iraqi militias (which has no known link to the Soldiers of Heaven) is the Mahdi Army of the radical cleric Moqtada Sadr.
For many Shia, the idea of a Muslim saviour who will end suffering and oppression has a special appeal.
At moments of crisis and chaos, they are more susceptible to the idea that the end of time is at hand.
Iraq is experiencing just such a crisis.
And in current circumstances southern Iraq - the Shia heartland and traditionally the poorest and most neglected part of the country - seems fertile soil for zealotry.