Sadr spokesman Salah Al Obeidi said a statement on Sunday announcing the cancellation of a peace pact between the Sadrists and the Supreme Iraqi Islamic Council (SIIC) of Abdel Aziz Al Hakim was meant as a warning.
The two groups, which have clashed repeatedly in the past as they each sought control of Iraq's majority Shia community, signed the agreement on October 6 hoping to end the violence between their two militias.
"We are warning of consequences if the Supreme Islamic Iraqi Council does not take steps to resolve the problem between the two parties," said Obeidi, who is based in Najaf, a Shia shrine city south of Baghdad.
"Despite that, the Sadr movement's statements [on Sunday] did not mean putting an end to the agreement, but they were a yellow light for the SIIC."
The major disputes between the groups "are centred on the SIIC policy that neglects the Sadrists in southern Iraq, and the arrest operations against Sadrist leaders," Obeidi added.
On Sunday, Nassar Al Rubaie, spokesman for the Sadr bloc in parliament, told AFP that the October agreement "has failed and is cancelled."
The agreement followed tensions in the town of Diwaniyah, east of Najaf, between the local authorities controlled by the SIIC and Sadr's Mahdi Army militia.
Dozens of Sadrists had been rounded up in operations led by Iraqi security forces supported by US troops following confrontations between the rival militiamen during the second half of 2007.
Competition between the two Shia factions has often been violent, with a number of officials on either side assassinated.
At stake is control of local government in Iraq's mainly Shia southern provinces, which are rich in oil, and in particular in the large town of Basra, the main port for exporting hydrocarbons.
Rivalry between the two movements is likely to increase ahead of provincial elections scheduled for October 1.
The SIIC has close links with Iran, and its chief Abdel Aziz Al Hakim often visits Tehran.
He is also welcomed in Washington, where he is regarded as a key player on the Iraqi political scene. (AFP)
Sadr backtracks on end of truce with rival Iraqi Shia