The statement, which was posted on his Web site, accused the U.S.-backed government of Shiite Prime Minister Nouri al-Maliki of betraying the movement and the Iraqi people.
"So I direct my last warning and speech to the Iraqi government to refrain and to take the path of peace and abandon violence against its people," al-Sadr said in the statement. "If the government does not refrain and leash the militias that have penetrated it, we will announce an open war until liberation."
Al-Sadr fiercely opposes the U.S. presence in Iraq and launched two major uprisings against U.S.-led foreign forces in 2004. His Mahdi Army militia also was accused of being behind some of the worst retaliatory sectarian violence against Sunnis after the February 2006 bombing of a key Shiite shrine in Samarra, north of Baghdad.
The cleric ordered his fighters to stand down in late August. But the truce has been severely strained by crackdowns against his Mahdi Army militia in Baghdad's Sadr City and the southern city of Basra.
"Do you want a third uprising?" al-Sadr asked in the statement.
He also evoked a comparison with Saddam Hussein's Sunni-dominated regime, which widely suppressed Iraq's majority Shiites.
"Despite our freeze of the Mahdi Army, our initiatives to defuse the tension and our calls for peaceful protests and strikes, after all these negotiations and concessions, you are becoming arrogant and adopt the policies of Saddam who used to ban Friday prayers, close the clerics' offices and resort to assassinations," he said.
The lifting of the Sadrist cease-fire could jeopardize recent security gains. The military considers the truce one of the pivotal factors behind a sharp decline in violence, along with a Sunni revolt against al Qaeda in Iraq and an influx of some 30,000 U.S. troops.
The recent fighting began when al-Maliki launched an operation against Shiite militias in Basra on March 25, prompting widespread retaliation throughout the southern Shiite heartland as well as the main Mahdi Army stronghold of Sadr City.
Al-Maliki, himself a Shiite, also said publicly this month that al-Sadr must disband the Mahdi Army or get out of politics.
The government and the U.S. military have said they are targeting criminal gangs, not al-Sadr's movement. But the cleric and his followers have accused them of trying to undermine the group ahead of expected provincial elections in the fall.
Iran Denounces Operations In Sadr City
Iran criticized U.S. military operations in Baghdad's main Shiite militia stronghold of Sadr City, warning they will worsen tension as fresh fighting there Saturday claimed at least 14 lives.
Iraq's Shiite-dominated government, meanwhile, claimed success in a new push against Shiite militants in the southern city of Basra, sending troops into a district where militiamen fought soldiers to a standstill last month.
Iran's ambassador to Iraq told reporters that his government supports the Iraqi move against "lawbreakers in Basra" but that the "insistence of the Americans to lay siege" to Sadr City "is a mistake."
Qomi warned that the American strategy in Sadr City "will lead to negative results for which the Iraqi government must bear responsibility."
Fighting in both Basra and Baghdad erupted last month when Iraqi soldiers and police launched a major operation against Shiite militias and criminal gangs in the southern port city.
The conflict spread rapidly to Baghdad, where Shiite militiamen based in Sadr City fired rockets at the U.S.-protected Green Zone, killing at least four Americans. U.S. officials say many of the rockets fired at the Green Zone were manufactured in Iran.
The Iranians helped mediate a truce March 30, which eased clashes in Basra and elsewhere in the Shiite south. But fighting persisted in Baghdad as U.S. and Iraqi forces sought to push militiamen beyond the range where they could fire rockets and mortars at the Green Zone.
The Americans are attempting to seal off much of Sadr City, home to an estimated 2.5 million people, and have used helicopter gunships and Predator drones to fire missiles at militiamen seeking refuge in the sprawling slum of northeast Baghdad.
At least 14 people were killed and 84 wounded Saturday in Sadr City fighting, police and hospital officials said. Sporadic clashes were continuing after sundown, with gunmen darting through the streets, firing at Iraqi police and soldiers who have taken the lead in the fighting.
According to the Interior Ministry, at least 280 Iraqis have been killed in Sadr City fighting since March 25, including gunmen, security forces and civilians.
In Basra, Iraq's second largest city about 340 miles southeast of Baghdad, Iraqi soldiers backed by British soldiers pushed their way into Hayaniyah, the local stronghold of the Mahdi Army of anti-American cleric Muqtada al-Sadr.
As the operation got under way, British cannons and American warplanes pounded an empty field near Hayaniyah as a show of force "intended to demonstrate the firepower available to the Iraqi forces," said British military spokesman Maj. Tom Holloway.
Last month, Iraqi troops met fierce resistance when they tried to enter Hayaniyah. On Saturday, however, Iraqi soldiers moved block by block, searching homes, seizing weapons and detaining suspects.
Lt. Gen. Ali Ghaidan said he expected the whole area to be secured by Sunday. He said troops had detained a number of suspects but refused to give details until the area was cleared.
The fighting in both Basra and Baghdad is part of a campaign by Prime Minister Nouri al-Maliki, a Shiite, to break the power of Shiite militias, especially al-Sadr's Mahdi Army, and improve security in southern Iraq before provincial elections this fall.
Al-Sadr's followers believe the campaign is aimed at weakening their movement to prevent it from winning provincial council seats at the expense of Shiite parties that work with the United States in the national government.
Tension between the Sadrists and other Shiite parties had been rising for months before the Basra crackdown and escalated after parliament last month approved a new law governing the provincial elections.
Clashes also broke out near Nasiriyah, a Shiite city about 200 miles southeast of Baghdad, leaving at least four policemen and 16 suspected militants dead, police said. A curfew was clamped on the town of Suq al-Shiyoukh, where the fighting occurred.
Meanwhile, the U.S. military said an American soldier was killed by a roadside bomb while on patrol in Salahuddin province. At least 4,038 members of the U.S. military have now died since the war started in March 2003, according to an Associated Press count.
Elsewhere in Iraq, at least five people died and 18 were injured in separate bombings in the northern cities of Mosul and Kirkuk and the Diyala provincial capital of Baqouba.
The attacks capped a violent week that has raised concerns that suspected Sunni insurgents are regrouping in the north. U.S. and Iraqi troops have stepped up security operations in Mosul, believed to be one of the last urban strongholds of al Qaeda in Iraq.