His warning came as police reported finding 38 corpses, most bearing signs of torture, around Baghdad.
The spokesman for US forces in Iraq has also acknowledged a sharp rise in the daily average of attacks across the capital in recent days.
"I call on all Iraqis of every sectarian and ethnic community to realise the magnitude of the danger threatening the future of the country and to unite and forsake hatred and violence," Grand Ayatollah Sistani said in a statement.
"Replace it with love and peaceful dialogue to resolve our conflicts."
Ayatollah Sistani, who commands immense respect across the country, said "the enemy" had sparked civil strife between followers of the rival Shi'ite and Sunni Islamic traditions when they blew up a Shi'ite shrine in Samarra in February.
His plea follows a bloody period that has seen sectarian massacres in Baghdad as well as massive bombs in the southern city of Kufa and the northern town of Tuz Khurmatu.
The violence has been at its most extreme in Baghdad itself, despite a month-long security operation aimed at stabilising the capital.
According to coalition forces spokesman Major General William Caldwell, the average daily number of attacks in the city jumped from around 24 over the past month to 34 in the past five days alone.
Major General Caldwell said the increased use of checkpoints and the deployment of 50,000 US and Iraqi forces on the ground had prevented "countless attacks".
At least three car bombs exploded in Baghdad in the latest violence, including one at a traditional downtown market area which killed three people and wounded 10 others. Another two blasts in the city killed one person each.
In other violence, a car bomb in the oil city of Kirkuk targeting a passing police patrol hit civilians gathered at a popular ice cream parlour instead, killing five and wounding 14.
Four people were killed by a car bomb north of Samarra in the village of Hojjaj, while elsewhere in the country two others were killed in attacks.