The chief minister of the Indian-administered part of Kashmir has appealed directly to the people for calm, accusing politicians of fomenting trouble after fresh clashes between Hindus and Muslims.
The rival groups burned homes in Paddar, a village about 50km north of the town of Kishtwar, where clashes between the two groups during Muslim holiday celebrations on Friday killed at least two people and injured 24.
"Rather than appeal to political parties, where I know my appeal will fall on deaf ears, I am using the channels
of the media to appeal to the people of Jammu and Kashmir not to fall prey to rumours, not to allow these political parties to exploit their sentiments," Omar Abdullah, chief minister of Jammu and Kashmir, said on Sunday.
Police rushed to Paddar on Saturday to control the situation, a police officer said on condition of anonymity because he was not authorised to talk to the media.
Three people suffered bullet wounds and were taken by helicopter to a nearby hospital, the official said.
In Kishtwar, government forces fired warning shots on Saturday to enforce a strict curfew and to push angry people back into their homes following Friday's deadly clashes.
Scores of shops, vehicles and two hotels were set on fire by the mobs on Friday.
The rioters also looted guns from a private arms shop in the area.
Police said the violence broke out after several hundred Muslims staged a march and shouted slogans demanding freedom from Indian rule.
They were then attacked by Hindus who objected to the demonstration, authorities said.
Kashmir is divided between India and Pakistan by a heavily-militarised, UN-monitored boundary known as the Line of Control. Both countries claim the territory in full.
Anti-India feelings run deep in Kashmir, where about a dozen rebel groups have been fighting against Indian rule since 1989. More than 68,000 people, mostly civilians, have been killed.
The rebel groups activities have largely been controlled by Indian troops in recent years, and resistance is now principally expressed through street protests.