Radical cleric Muqtada al-Sadr told worshippers at Friday prayers that he will not accept calls to tone down his anti-American rhetoric.
He accused the US of being “the enemy of Islam and Muslims and jihad is the path of my ancestors.”
Al-Sadr made the speech at a mosque in Kufa, a stronghold of his Al-Mahdi army.
US forces are surrounding Najaf, where al-Sadr is based. Tribal leaders and police are holding intensive talks in the city aimed at reducing tensions and preventing an American assault on the city, which is home to one of the shrines holiest to Shiite Muslims.
Lieutenant Colonel Pat White said US forces were holding back to give talks a chance and out of respect for Friday, the Islamic day of prayer.
“We want to show that we respect what that day means to the Islamic world,” White said, adding that forces were closely monitoring speeches that clerics were giving at prayer services.
In his address in Kufa, six miles north of Najaf, al-Sadr said: “Some people have asked me to tone down my words and to avoid escalation with the Americans.
"My response is that I reject any appeasement with the occupation and I will not give up defending the rights of the believers. America is the enemy of Islam and Muslims and jihad is the path of my ancestors.”