"The group relies on children and is connected to Al-Qaeda. It works to recruit children and young people to carry out suicide attacks and to aid the terrorist groups in detonating roadside bombs," he said.
The name of the group likely comes from the traditional Islamic belief that when children die they become birds in paradise.
The children were arrested west of Kirkuk, the main oil hub in northern Iraq that is the subject of a long-standing dispute between Baghdad and the autonomous Kurdish region and has seen several recent attacks.
Zaidi said security forces are still investigating the group and have arrested other suspects, but he declined to give further details because of the secrecy of the operation.
Another Iraqi officer said the existence of the children's unit proves Al-Qaeda is losing ground.
"This is a new method and it is the method of someone who is losing the war," the officer said on condition of anonymity.
"Their infrastructure is being destroyed and their leaders are being arrested and killed... They are sending a message that 'we are still here, but we have to rely on every method to carry out our terrorist operations."
US and Iraqi forces launched a major operation in and around Kirkuk last week after a car bomb exploded next to a bus carrying police through the city, killing ten policemen and wounding more than 20.
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