In a videotape obtained by Aljazeera and aired on Monday, masked men showed the cache of weapons seized.
It is unclear how many weapons were in their possession.
The masked armed men also confirmed they clashed with an occupation patrol at a bridge in Kufa on Tuesday, injuring a number of US soldiers and damaging three military vehicles.
Occupation troops killed 13 members of al-Sadr’s army in skirmishes near the city of Kufa overnight, a senior US military official said on Tuesday.
He said 14 fighters were captured in the town, which is next door to Najaf, where al-Sadr is holed up with thousands of fighters.
On Monday, US officials said they killed 16 of al-Sadr’s fighters in al-Sadr city. But an al-Sadr's spokesmen said the US military routinely exaggerated Mahdi Army casualties.
Al-Sadr ordered his fighters on Monday to launch a broad new offensive against US-led occupying forces after a US crackdown on his strongholds in Baghdad - where tanks flattened his office this week - and across the south.
Meanwhile, dozens of demonstrators marching at the instigation of Iraq's biggest Shia party, the Supreme Council for the Islamic Revolution in Iraq (SCIRI), fled in panic when the Mahdi Army fighters opened fire.
Demanding the fighters evacuate their stronghold near Imam Ali mosque, protesters chanted slogans such as "leave Najaf to the residents of Najaf".
Al-Sadr City saw intense clashes
between US troops and fighters
As they headed towards the mosque, one of the holiest Shia shrines in the world, the marchers ignored orders from al-Sadr's fighters to disperse, causing the fighters to fire into the air.
The demonstrators fled and nearby shopkeepers rolled down their shutters, but fighters denied firing shots which they said came from local residents.
"The Mahdi Army protected the demonstrators ... America is trying to provoke fighting amongst the Shia. It is not and will not succeed," Abu Husayn al-Hamadani, a senior fighter, told AFP.
Fighters stationed on a hill south of the shrine said four US armoured Humvees came within one kilometre of the mosque, as American planes flew overhead around the time of the demonstration.
The fighters were ordered not to open fire on either the demonstrators, who held up pictures of the revered Shia spiritual leader Grand Ayat Allah Ali al-Sistani, or the Americans.