It was not immediately clear why he chose to return now to his base in the Shiite holy city of Najaf from Iran. His speech had new nationalist overtones, calling on Sunnis to join with him in the fight against the U.S. presence. He also criticized the government's inability to provide reliable services to its people.
Al-Sadr's reappearance, four months after he went underground at the start of the U.S.-led Baghdad security crackdown, came just hours before his Mahdi Army militia lost its top commander in the southern city of Basra in a gun battle with British soldiers, Iraqi police said.
The 33-year-old al-Sadr is believed to be honing plans to consolidate political gains and foster ties with Iran — and possibly trying to take advantage of the absence of a major rival, Supreme Islamic Council of Iraq leader Abdul-Aziz al-Hakim, who was recently diagnosed with lung cancer and went to Iran for treatment.
The U.S. military also announced Friday that six U.S. soldiers were killed in a series of attacks across Iraq in recent days. The deaths put May on pace to be one of the deadliest months for U.S. forces here in years.
Al-Sadr traveled in a long motorcade from Najaf to the adjacent holy city of Kufa on Friday morning to deliver his sermon before 6,000 worshippers.
"No, no for Satan. No, no for America. No, no for the occupation. No, no for Israel," he chanted in a call and response with the audience at the start of his speech.
He repeated his long-standing call for U.S. forces to leave Iraq.
"We demand the withdrawal of the occupation forces, or the creation of a timetable for such a withdrawal," he said. "I call upon the Iraqi government not to extend the occupation even for a single day."
He also condemned fighting between his militia and Iraqi security forces, saying it "served the interests of the occupiers."
"I advise the brothers in the Mahdi Army to turn to peaceful methods if they are attacked by weak-spirited people," he said.
In Washington, National Security Council spokesman Gordon Johndroe expressed hope that al-Sadr's reappearance signaled that he wanted "to play a positive role inside Iraq."
"He has an opportunity to be a part of the political reconciliation process. We'll see if he and his followers participate," he said.
Al-Sadr's Mahdi Army fought U.S. troops to a virtual standstill in 2004, but to avoid renewed confrontation he ordered his militants off the streets when the U.S. began its security crackdown in the Baghdad area 14 weeks.
His associates say his strategy is based partly on a belief that Washington will soon start reducing troop strength, leaving behind a hole in Iraq's security and political power structure that he can fill.
Al-Sadr also believes that Shiite Prime Minister Nouri al-Maliki's government may soon collapse under its failure to improve security, services and the economy, al-Sadr's aides say. A political reshuffle would give the Sadrist movement, with its 30 seats in the 275-member parliament, an opportunity to become a major player.
In a move that could hasten the collapse, al-Sadr pulled his supporters out of al-Maliki's government last month over the prime minister's refusal to call for a timetable for a U.S. withdrawal.
The Mahdi Army received a severe blow Friday when its Basra leader, Wissam al-Waili, 23, also known as Abu Qadir, was shot and killed along with his brother and two aides during a battle with British forces Friday afternoon, police said.
The battle began about 4 p.m. when British forces attempted to arrest al-Waili after he left a mosque in Jumhoriyah, a middle class, residential area in central Basra, police said. Al-Waili and his three companions opened fire and were killed when the British troops shot back, police said.
The British Broadcasting Corporation reported that U.K. military officials in Iraq said it was an Iraqi army unit conducting an arrest operation - backed up by Brtish troops - that initially engaged al-Waili.
Meanwhile, three U.S. soldiers were killed in roadside bombings in the capital and the surrounding areas, the military said Friday. Two others were killed in explosions north of Baghdad, and a sixth soldier was hit by gunfire in the volatile Diyala province, the military said.
The killings raised the American death toll for the month to at least 88. Last month, 104 U.S. troops were killed in Iraq.
Military officials have warned that U.S. casualties were likely to rise as more troops deployed to Iraq and the military pushed ahead with its Baghdad security crackdown.
"As we are conducting more operations, we are going into areas we haven't gone into in force before. We have more people on the ground, this leads to an opportunity for more contact, more conflict, more clashes," said Lt. Col. Christopher Garver, a U.S. military spokesman. "This is a tough fight. We are in a war."
In other developments: