"We have said clearly and directly that the government must forge ahead," the right-wing leader told more than 1,000 sympathisers gathered in front of his Rome mansion.
"The government must continue to take economic measures and we have said clearly and directly that the parliament must forge ahead to vote for these economic measures," Berlusconi went on.
The demonstration of support was organised by the playboy tycoon's People of Freedom (PDL) party, with the slogan "Sunday in the street for democracy and freedom."
The PDL said on its website the gathering "will be the opportunity to huddle around our leader and confirm with him the great strength and the great
determination of a people who do not know hatred and who really believe in freedom and democracy."
A visibly moved Berlusconi told the supporters: "Your closeness and your warmth comfort me after all the pain and suffering of the past few days."
Italy's top court on Thursday handed Berlusconi his first definitive conviction in a 20-year political career dogged by legal woes and sex scandals.
The court ordered the three-time premier to do a year of community service or be placed under house arrest — a sentence due to be enacted in October.
He is also barred from running in elections for six years and the police on Friday withdrew his passport to prevent him from leaving the country.
Berlusconi lashed out at the judges who sentenced him for tax fraud.
"I'm here, I'll remain here and I'm not giving up and we will all continue together this battle for democracy and freedom so that citizens aren't afraid of finding themselves in prison without having done anything wrong," he declared.
Supporters of Berlusconi threatened to resign from the government on Friday after the verdict against the billionaire tycoon.
"We are ready to resign to defend our ideal," Interior Minister Angelino Alfano, Berlusconi's closest ally from the PDL, was quoted by Italian media as saying at a meeting with the mogul.
Berlusconi himself reportedly said: "We have to ask for new elections as quickly as possible and win them."
Prime Minister Enrico Letta, who presides over the uneasy alliance between his centre-left Democratic Party (PD) and Berlusconi's centre-right coalition, earlier pleaded for calm "for the good of Italy".
But he added: "I do not think a deterioration is advantageous and I do not believe that continuing at any cost is in the interests of the country."
Italy's current government was installed following a two-month deadlock between Berlusconi's group and their eternal rivals, the PD, after close-run February elections in which both won around a third of the vote.
"The government is a dead man walking," the Il Fatto Quotidiano daily said in an editorial.
Opinion polls based on surveys carried out in the run-up to Thursday's verdict indicated that Berlusconi's coalition would win new elections by a large margin.