More than 70,000 Hindus are heading to the northern town of Ayodhya that has been a lightning rod for Hindu-Muslim tension since the Babri mosque was destroyed in 1992.
The mosque's destruction sparked some of India's worst religious rioting, killing 3000 people.
Some of the 3100 arrested so far have been released and sent back where they came from, but police have also besieged a camp on Ayodhya's outskirts.
"They can do whatever they like inside, but ... they will not be allowed to step out of the premises," district magistrate Deepak Kumar said.
Police are on alert across northern India and troops are due in Ayodhya within the next two days to reinforce more than 10,000 police already deployed.
The last time Hindu hardliners called a rally in March last year, thousands made their way to Ayodhya, but many were stopped by police and the protest fizzled out peacefully.
The Vishwa Hindu Parishad (VHP), a hardline ally of the ruling Bharatiya Janata Party, has called the rally to push for a massive temple on what Hindus believe is the birthplace of the revered god-king Ram.
Deputy PM LK Advani is accused
of inciting the Ayodhya riots
The rally has fuelled fears of fresh communal violence after more than 1000 people, mostly Muslims, were burned or hacked to death last year in the western Gujarat state.
More than 20,000 Hindu activists have been piling into trains and buses out of Gujarat.
Another 50,000 are expected from the western Maharashtra state, whose capital, Bombay, was the scene of some of the worst rioting after the destruction of the Babri mosque.
Officials have temporarily barred the VHP's top three leaders from Ayodhya.
The government has banned the rally in accordance with a court ruling outlawing any religious activity near the disputed site until the issue is settled.