"Fight the blasphemous, fight the Americans," al-Sadr said in a statement issued in Najaf, according to the New York Times.
Read a 60 Minutes interview with al-Sadr.
"This is a revolution against the occupation force until we get independence and democracy," al-Sadr spokesman Ahmed Shaybani said in a telephone interview with the Washington Post.
Insurgents loyal to al-Sadr battled fiercely with U.S. and Iraqi forces in Najaf in fighting that killed one U.S. soldier, seven Iraqi civilians and seven militants. Five GIs were wounded, and a U.S. helicopter was shot down.
Bloodshed quickly spread to other Shiite areas, with each side blaming the other in a profound threat to a shaky two-month-old truce.
Al-Sadr's men also fought with U.S. troops in the Baghdad neighborhood of Sadr City, wounding seven Americans; shot at government offices in the southern city of Amarah; and clashed with British forces in Basra, where one militant was killed.
"The cease-fire is over because of the actions of the occupation forces, and the situation has started to deteriorate," warned Sheik Abdul Hadi al-Daraji, a spokesman for al-Sadr in Baghdad.
During the fighting in Najaf, a U.S. UH-1 helicopter was hit by gunfire and crashed, injuring the crew, and Iraqis said at least seven militants and seven civilians had been killed and 54 wounded.
In other developments:
In the southern city of Basra, militants loyal to al-Sadr threatened Thursday to attack British forces in the area unless they freed four men detained in a raid on al-Sadr's party's office in Basra two days before.
"Otherwise the Mahdi army will confront the British forces, enter the city and take over important government buildings," said Salam al-Maliki, a spokesman for al-Sadr's Mahdi army militia.
The British said they hadn't received a formal ultimatum, "only rhetoric," said Maj. Ian Clooney. He said the men had been detained for further questioning, and did not elaborate.
On Tuesday, police said that al-Sadr's militias had kidnapped police officers apparently to use as leverage to force authorities to release militants being detained. His group denied the accusations, saying police were provoking al-Sadr's supporters by trying to arrest some of the group's leaders.
In the vehicle bombing in Mahawil, 53 miles south of Baghdad, a bus approached, two gunmen clad in police uniforms hopped out and opened fire on the police station. They escaped, while the bomber inside the bus died in the bomb explosion.
"At 8:30 this morning, a minibus approached Mahawil police station with three people inside," said Sabah Kadhim, a spokesman for the Interior Ministry. "Two of them got out and opened fire on the guards, while the driver carried on toward the police station and blew up."
Insurgents have repeatedly targeted police as part of their campaign to destabilize the interim government — killing 710 from April 2003 to May 2004. The guerrillas see police as collaborators with the American-led coalition forces.
Iraqi authorities clamped a curfew on the area in Mosul where the fighting there took place, and sealed off bridges into the city to restore order. The fighting was the fiercest in Mosul in months, and local authorities said insurgents appeared to be testing the police. No Iraqi or coalition forces were killed in the violence, the U.S. military said.
Two of the militants killed included a member of the al Qaeda-linked militant group Ansar al-Islam and a cousin of the group's founder, said Sarkawt Hassan, security chief in the Kurdish province of Sulaimaniyah.
The body of Sayed Omar Omar Mohammed, also known as Sayed Qutb, the cousin of founder Mullah Krekar, was found in a car in al-Yarmouk area in Mosul, Hassan said.