An interior ministry official said they grabbed people working in the area, where several travel agencies are based and buses pick up passengers travelling mostly to Jordan, Syria and Lebanon.
The victims, including two Syrians, were herded into about a dozen vehicles, according to witnesses. It was not known who was behind the attack.
Police said the attackers carried out what appeared to be a co-ordinated operation.
The head of the police commandos in Baghdad, Major-
General Rashid Fulayah, contradicted early reports that the operation was officially sanctioned.
"The ministry of interior has nothing to do with this arrest and especially not the commando forces and the forces of public order brigades who are not authorised to do such operations," he said.
One witness, Hamza Ali, said the uniformed men were armed with rifles and grenades. He said they drove up in 10 pick-up trucks.
"It took them about five minutes to take people away," he said. "One, two, three, four - one after another."
Other witnesses said the pick-up trucks were accompanied by two vehicles painted with the distinctive camouflage pattern of the commandos.
The confusion over whether the raid was officially sanctioned or a criminal operation is a reflection of the widespread suspicion people in Baghdad have of security forces, some of which are believed to be infiltrated by militias.
A number of other violent operations have been carried out by people in uniforms, which can be easily bought in the city's markets.
Nuri al-Maliki, the Iraqi prime minister, has said that the restoration of security to Baghdad is a priority for his government, which has yet to agree on an interior minister.