U.S.-appointed Iraqi official arrested by coalition soldiers.(Chicago Tribune)

Byline: Laurie Goering

BAGHDAD, Iraq _ Coalition soldiers arrested the U.S.-appointed interim mayor of Najaf on Monday, charging the unpopular former Iraqi army colonel with kidnapping, theft, corruption and intimidation.

"We clearly made a mistake with this chap," a coalition official said. But officials also praised the removal of Abu Haydar Abdul Mun'im as a sign the rule of law is returning to Iraq.

A spokesman for the U.S.-led coalition ruling Iraq said Monday that Mun'im came under suspicion after Iraqis in the Shiite-dominated city southwest of Baghdad raised allegations that the interim governor was involved in holding hostages, pressuring government employees to commit financial crimes, stealing funds and attacking a bank official.

The mayor's arrest came as American forces swept across central …