Mr. Sadr warned Saturday that continued attacks on his Shiite militiamen could spark an "all-out war." But Ms. Rice sees progress, saying a new political unity was emerging around Iraqi Prime Minister Nouri al-Maliki's efforts to diminish the power and influence of the Mahdi Army.
"You have seen a coalescing of a center in Iraqi politics in which the Sunni leadership, the Kurdish leadership, and elements of the Shiite leadership that are not associated with these special groups have been working together better than at any time before," Rice said, referring to "special groups" within the Mahdi Army that the US says are rogue elements trained and funded by Iran.
With Iraq's Sunni and Kurdish leaders backing Mr. Maliki, a Shiite, Rice said the combined effort against Sadr marked a turning point that was a "moment of opportunity."
But the ongoing offensive against the Shiite militia, which began last month, didn't start well for Iraq. The government has charged some 1,300 Iraqi soldiers with retreating from and abandoning the initial Basra battle. The fighting spread to Baghdad, and scores of civilians have been killed. Also, in Basra, the situation didn't begin to calm until the United States military sent air power in support of government forces and a cease-fire was brokered in Iran.
On Saturday, Iraqi forces announced they had taken over the last Mahdi Army stronghold in Basra in operations with US and British forces. The Americans have been pressing Maliki for more than a year to confront the Shiite militias that have gained a stronghold over much of southern Iraq.
The brunt of the government's action fell on the Mahdi Army and other supporters of Sadr, who wields considerable power both in his parliamentary bloc and as an extragovernmental influence.
And as if to respond to Rice's high-profile show of American support for Maliki's actions, the Green Zone in Baghdad was rocked by mortar fire during the visit – probably fired from Sadr's bastion of support north of the center in Sadr City. In recent days the US military has built a wall around the southernmost section of the 2 million mostly poor residents in an effort to keep out the teams of rocket and mortar launchers who have used the area to target the Green Zone.
Gunmen also attacked a US checkpoint with machine guns, rocket-propelled grenades, and mortar shells. That strike sparked a battle between the US and the militiamen that left at least seven militants dead. Iraqi forces reportedly killed three men who they said were planting roadside bombs.
"There was an uptick in violence in comparison with the past couple of weeks," said Army spokesman Lt. Col. Steve Stover. He declined to link it to Sadr's warning, which was broadcast over mosque loudspeakers inside Sadr City late Saturday.
In his statement, Sadr said "[I am] giving my final warning to the Iraqi government … to abandon violence against the Iraqi people. If the government does not [stop its attacks] we will declare an all-out war until liberation."
But some Sadr supporters say they believe Sadr's principal fight is likely to remain political. They claim Maliki's split with Sadr is really over carving up Shiite support in provincial elections set for this fall. But they also say that Sadr's supporters will rally to him, especially if he is perceived to be under attack from the American-backed Maliki.
"We say that Maliki's troops are Iraqis but they have grown the tail of the occupation," says Sadr supporter Sadek Jaffer, interviewed inside Sadr City on Sunday. "We will not turn away from Sadr just because Maliki tells us to."
Inside the Shiite district, many residents say they are tired of the Iraqi and US military operations carried out nightly over the past week. But some young men faulted the government for pushing Sadr into a corner and said any all-out war between Sadr supporters and the government would be Maliki's responsibility.
"His eminence Sadr has kicked the ball back to the government's side of the field with his statement yesterday," says Settar Abu Ali, an unemployed driver for a food wholesale company. "If the government answers with more attacks on the people, we will join a ground war to liberate our cities."
The Iraqi Army and US forces closed main checkpoints in and out of the vast slum Sunday, slowing activity and leaving the streets unusually quiet. Some shops were open and a section of the enclave that is home to rows of flour distributors was operating, but in most areas residents stayed behind closed doors.
In a no mans land near the local offices of Sadr's movement, Mr. Ali and his neighbors pointed out destroyed houses, a broken water main spewing precious clean water in the dusty street, and bullet holes in nearby shops, all the result of Iraqi Army and American attacks, they claimed.
As gunfire rang out from a main thoroughfare a block away, the men spoke of how that morning Iraqi soldiers had shot and killed two young men pushing a wheelbarrow of cement. A third young man was wounded and died as he was carried away. It was the three men the US military reported were killed by the Iraqis because they were planting bombs.
"Maybe they thought they were planting [roadside] bombs, but that is not true, they were just transporting cement," says Mahmoud Haran, who runs a small candlemaking shop that was destroyed recently when American helicopters attacked the street.
US helicopters, unmanned drones, and in some cases tanks have been called in to the neighborhood in an effort to stop the mortar and rocket fire hitting the Green Zone over recent weeks. That fire picked up sharply in late March when Maliki launched the government operation against Shiite militias in Basra and in Sadr City.
But Mr. Haran says most of the families in his immediate neighborhood had no connection to antigovernment forces. Now about two-thirds of the area's 1,000 families have moved away, his shop, which employed 20 workers, is shuttered, and "those young men who have no job anymore are more likely to end up fighters now."
But Sadr, who has appeared to be on the brink of defeat before, only to bounce back politically, may yet find a way to remain standing without actually launching his all-out war – especially if he sees powers that have been his support increasingly aligned against him.
Not only does Maliki seem to be focusing what the government has dubbed an antimilitia campaign almost exclusively against Sadr, but even the Iranians who have given Sadr succor are making supportive noises toward Maliki's undertaking against "criminal" groups.
That may be one explanation among many as to why an ongoing government sweep in Basra in the Sadr stronghold of Al-Hayaniyah is proceeding with little resistance.
"The operation seeks to disarm these neighborhoods where criminal elements have been storing weapons and attacking government forces," says Brigadier Gen. Mahammed al-Askeri, Iraqi Army spokesman. "The idea of course is also to prevent the fighters there from going out to other nearby provinces and continuing their fight."
Such fighters are thought to have received backing from Iranian-trained groups, what the US military calls "special groups," when the fighting in Basra started.
But if the Iranians are now tempering their support for Sadr – at least for his more militant wing – and if Iraq's Sunni and Kurdish political factions remain behind Maliki, Sadr may have met his match.
Rice said during her Baghdad foray that Sadr was welcome to join in Iraq's way forward as long as his participation is political. The bearded cleric still has the largest single bloc in the Iraqi parliament, the value of which he is no doubt mulling as he decides what to do next.