Here are the 10 big developments in this story:
A state of high alert has been declared for the entire state of Uttar Pradesh. Soldiers are conducting door-to-door searches in Muzaffarnagar, 150 kilometres north-east of Delhi. A curfew has been imposed in three districts.
"I would appeal to all people there to maintain peace and don't trust or listen to any rumours," said Chief Minister Akhilesh Yadav.
The first clashes erupted on Saturday when thousands of Hindu farmers held a meeting in the village of Kawal to demand justice for last month's killing of three men who allegedly tried to protect a woman from being harassed.
The state's Minority Affairs Minister, Azam Khan, has alleged that at Saturday's meeting, provocative speeches called for action against Muslims, according to the Associated Press. The farmers were attacked as they were going home.
Four BJP state legislators allegedly made incendiary speeches at the farmers' maha-panchayat.
The gathering was illegal because large meetings have been banned since the deaths that took place in Kawal last month.
Police sources say both Hindu and Muslim leaders have ignored the ban in recent days.
Union Home Minister Sushil Kumar Shinde has said that India is seeing a rise in communal violence, with 451 cases being already reported this year, as compared to 410 for all of last year. (Read)
Communal tension is expected to escalate in the run-up to the national elections, the Home Minister cautioned, adding that all 28 states have been warned to improve their ability to collect intelligence to prevent riots.
The crisis in Muzaffarnagar has been attributed to a failure of the Samajwadi Party government by all other parties including the Congress. The Prime Minister's minority government is propped up by the Samajwadi Party.