Moqtada Sadr declared a truce last year but his militia remains powerful
Iraqi Shia cleric Moqtada Sadr has threatened to wage "open war" on the Baghdad government if it does not halt operations against his supporters.
Moqtada Sadr said he was giving the government a "last warning", and urged it to take "the path of peace".
His statement came as Iraqi troops, with US and UK support, clashed with his forces in Baghdad and the south.
In August the cleric's militia declared a ceasefire, pledging not to attack government or foreign soldiers.
"I'm giving the last warning and the last word to the Iraqi government," Moqtada Sadr said.
"Either it comes to its senses and takes the path of peace... or it will be (seen as) the same as the previous government," he added, referring to former President Saddam Hussein's fallen regime.
"If it does not stop the militias that have infiltrated the government, then we will declare an open war until liberation," he added.
Moqtada Sadr issued the warning after soldiers launched fresh operations against positions being held by his Mehdi Army.
The BBC's Crispin Thorold in Baghdad says the government is slowly beginning to establish a presence in areas where the Mehdi Army had been all-powerful
Iraqi troops are hoping to disarm Mehdi Army militiamen
In Baghdad the US army and Iraqi troops clashed with militiamen in the area of Sadr City. Local hospitals say that seven people died.
Sadr City is the site of frequent confrontations between Shia fighters and Iraqi and coalition forces.
Tensions have been increased by the construction of a wall in the district by US and Iraqi forces.
They say the wall aims to hamper the militants who regularly fire mortars at the Green Zone, Baghdad's huge diplomatic and government compound.
Also on Saturday, clashes were reported between Iraqi forces and the Mehdi Army in the southern city of Nasiriya.
Battle in Basra
Meanwhile, in the southern city of Basra, Iraqi security forces, backed by British artillery and American warplanes, moved into the district of Hayania, where Moqtada Sadr also has strong support.
The operation, which apparently sought to seize illegally held weapons, opened with a massive display of firepower by supporting US and UK forces, who pounded a deserted area of the district with artillery.
The US-led air raids caused damage
"British artillery and US planes conducted a firepower demonstration to the west of Hayania, to give a demonstration of the firepower available if required," said a spokesman for British forces, Major Tom Holloway.
BBC sources said the operation first met fierce resistance. But the latest reports say the violence has subsided.
Basra was the scene of intense fighting some three weeks ago, after Iraqi forces made an attempt to disarm militias operating in the city.
That operation ground to a halt when the army faced considerable resistance from the militias, including the Mehdi Army.
The fighting spread to various parts of Iraq, hundreds of people were killed and thousands of civilians were trapped in their homes for days on end.
The militias were never disarmed, only promising to take their weapons off the streets.
The operation was criticised by US commanders as poorly planned and as failing to achieve its stated aims.
Gen Mohan al Furaiji, the architect of the operation, was moved back to Baghdad, but the Iraqi government insisted he was not being fired.
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