Thousands of Muslims are expected to attend a rally in London at the weekend to protest at both the publication of cartoons defiling the image of the Prophet Mohamed and the response of Islamic extremists.

Muslim leaders will use the demonstration to call for calm and urge the media to apologise for the offence they have caused. The rally, expected to be one of the biggest Muslim demonstrations in Britain, is to be sponsored by Muslim newspapers and broadcasters.

Ihtisham Hibatullah, of the Muslim Association of Britain, said: "Last weekend was very damaging for the Muslim community. We are sometimes held hostage by extremists on both sides."

Sir Iqbal Sacranie, secretary general of the Muslim Council of Britain, said: "British Muslims have been deeply hurt both by the provocative actions of the newspapers that printed these caricatures, but also by the disgraceful actions of a tiny group of extremists."

He added that the aim of the rally was to protest against the "rising wave of xenophobia towards Muslims across Europe".

Tony Blair told MPs that political correctness should not deter the police from arresting Muslim extremists who break the law. "There is a real issue about how the sensible moderate Muslim leaders go into their community and confront this type of extremism," he said. "But it is very important for our overall good relations in this country that people understand there is no political correctness that should prevent the police from taking whatever action they think is necessary."

The demonstration on Saturday will address the growing concerns about the treatment of Muslims in Britain and around the world, Sir Iqbal said. "This rally will aim to help British Muslims express their feelings peacefully and will call upon the newspapers concerned to apologise for the enormous offence and distress caused."

Mohamed Abdul Bari, chairman of the East London Mosque, said: "The hallmark of any civilised society is not just that it allows freedom of speech, but that it accepts this freedom also has limits."

The Asian man photographed outside the Danish embassy in London at the weekend wearing an imitation suicide bombing outfit was sent back to prison yesterday. In 2002 Omar Khayam, 22, from Bedford, was jailed for six years for possession of crack cocaine with intent to supply and had been on licence since being released last year. The Home Office asked the police to arrest Khayam for breaching the terms of his parole and he was returned to jail.

His actions were condemned by members of the predominantly Muslim community near his home in Bedford. Asif Nadim, the chairman of Khayam's local mosque, where he was an "occasional" visitor, said he was "an idiot" who had "gone too far" but said that the former student had intended not to dress as a suicide bomber, but as a "military man".

Muhammad Khan, a local councillor who lives on the same road as Khayam, said members of the Pakistani community in the town were dismayed at the image in the media. "No one condones his actions," he said.

Mohammad Sadiq, chairman of the Pakistani Welfare Association in Bedford, said: "He must have been led by others. They wanted to stage a protest."