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* Followers say they are ready to fight again
* Sadr said he will unleash militia if U.S. doesn't leave
By Muhanad Mohammed
BAGHDAD, April 23 (Reuters) - Hundreds of followers of anti-American cleric Moqtada al-Sadr took to the streets of Baghdad on Saturday, trampling U.S. flags and vowing to escalate military resistance if U.S. troops fail to leave Iraq this year.
It was the second major demonstration by Sadr's followers in recent days after the cleric issued a warning on April 9 he would unleash his Mehdi Army militia if U.S. troops were not out of Iraq by Dec. 31. More than 5,000 marched in the streets of Basra, Iraq's southern oil hub, on Thursday.
"I am ready to fight an American again and I am ready to die for Iraq," Haider al-Bahadili, a 33-year-old Mehdi Army member, said at Saturday's demonstration in western Baghdad's Shula district. "Decisions of Moqtada are orders. We must apply them."
The rally came a day after Admiral Mike Mullen, chairman of the U.S. military's Joint Chiefs of Staff, said during a visit to the capital Iraq's leaders must move quickly if they want U.S. forces to stay beyond year-end.
About 47,000 American troops remain to advise and train Iraqi forces. Prime Minister Nuri al-Maliki has said his police and army are ready to provide security and foreign troops will no longer be needed after Dec. 31.
The march marked the seventh anniversary of the formation of the Mehdi Army, which fought U.S. forces after the 2003 U.S.-led invasion that toppled dictator Saddam Hussein.
Men, women and children, some dressed in the black clothing of the Sadrist movement, trampled U.S. and Israeli flags and chanted slogans of loyalty to Sadr.
"If the occupier doesn't leave Iraq, we will face him militarily, culturally and in all fields," said Sheikh Nasir al-Saedi, a Sadr aide.
Sadr's militia fought U.S. forces after the 2003 invasion. U.S. commanders blamed the Mehdi Army for much of the bloodshed, which saw tens of thousands of Iraqis killed during the height of sectarian violence in 2006-07.
Maliki sent government troops to crush the militia in 2008.
Sadr's political movement won strong support in elections last year and overcame animosity toward Maliki to join his coalition government, formed in December after nine months of tense negotiations between Shi'ite, Sunni and Kurdish factions.
Politicians from Sadr's movement took part in the rally and expressed optimism U.S. forces would leave on schedule, but said the militia would be ready to fight.
"If there is an extension of the occupation forces, our position is clear -- lift the freeze on the Mehdi Army and restore its military activities," said Asmaa al-Moussawi, a Sadrist member of parliament. Sadr has been living and studying in Iran for years but returned to Iraq on Friday, a source close to the cleric said.
In Basra on Thursday, Mehdi army members staged a peaceful rally during which hundreds waved Iraqi flags and one protester dragged an effigy of a U.S. soldier through the streets. (Editing by Jim Loney and Sophie Hares)