He called for "my brothers in the army, police and Jaish al-Mahdi (al-Mahdi Army) to stop the bloodshed".
Sadr had warned on April 19 that an all-out war between government forces and the al-Mahdi Army could break out unless attacks on his fighters were stopped.
The violence in Sadr City is the latest in a crackdown against Shia fighters by forces from the Shia-led Iraqi government.
Hundreds of people are thought to have died in the operation by government forces since it was launched in the southern city of Basra and Sadr City in late March.
Also on Saturday, Iraq's Sunni vice president said that the return of his political bloc to the Shia-led cabinet was a priority.
Tariq al-Hashemi, who is a member of the National Accordance Front, said the government needs to reconcile quickly to "save Iraq".
The National Accordance Front has boycotted the Iraqi government for nearly nine months.
Al-Hashemi has in the past accused Nuri al-Maliki, Iraq's Shia prime minister, of sectarian favoritism
Al-Maliki has denied the accusation, saying that al-Hashemi has sought to undermine key legislation.