The source added that two terrorists were also killed by security forces in the operation in the town of Baiji in Saladdin province, al-Sumaria news reported.
According to the source, a number of Daesh commanders were among those killed or arrested.
Iraq has stepped up security ahead of Arbaeen as millions of pilgrims visit the country’s Shia holy sites to attend mourning rituals.
Arbaeen comes 40 days after Ashura, the martyrdom anniversary of the third Shia Imam, Imam Hussein (AS).
Each year, a huge crowd of Shias flock to Karbala, where the holy shrine of Imam Hussein (AS) is located, to perform mourning rites.
They also visit other holy cities in Iraq, including Najaf, Samarra and Kadhimiya.
In the past few years, around 20 million pilgrims from all over the world took part in the mourning ceremonies in the Iraqi holy city marking Arbaeen. This year it will fall on Saturday, October 19.