The land transfer plans caused anger among both Muslims and Hindus
At least two protesters have been killed in the Hindu-majority area of Jammu in Indian-administered Kashmir during demonstrations, officials say.
They say the protesters were shot and killed in the town of Samba after lengthy clashes with police.
Meanwhile, a demonstrator has also been killed in the Muslim-majority Kashmir Valley while protesting against alleged assaults on Muslims in Jammu.
A heavy security operation is now underway across Kashmir.
Officials say the atmosphere is tense in Jammu as demonstrations continue against the state government's decision to rescind the transfer of land to a Hindu shrine.
The BBC's Binoo Joshi in Jammu says that there were intense clashes between police and protesters prior to the firing in which the two demonstrators were killed.
Srinagar has seen violent protests over the land row
Officials say that more than 24 people - including about 15 policemen - were injured in the clashes.
On Monday, doctors in government hospitals in Jammu joined the agitation and walked out of their jobs. Emergency services were exempted from the strike.
In addition to extra troops on the streets, a curfew is in place and mobile phone text messaging has been suspended.
Our correspondent says that the depth of feeling is so strong over the shrine issue that it has become a mass movement.
Demonstrations have also been held in villages surrounding the city of Jammu.
Reports of alleged assaults on Muslims have been pouring in from different parts of Jammu almost every day and there have been reports of some houses belonging to Muslims being torched in the area.
Meanwhile, a shutdown has been observed in the Kashmir valley called by a prominent separatist leader Syed Ali Shah Geelani to "express solidarity" with the Muslims of Jammu.
Mr Geelani said that the administration has failed to protect the lives and property of Muslims in Jammu since the Hindu protests in support of the shrine began.
The Kashmir valley has witnessed violent protests in recent weeks following the government's decision to grant 40 hectares of forest land to the Amarnath Shrine Board.
Muslims argued the move was aimed at altering the demographic balance in the area.
The state government said the Amarnath Shrine Board needed the land to erect huts and toilets for visiting pilgrims.
But after days of protests by Muslims in Kashmir valley, in which five people were killed and hundreds wounded, the government rescinded its decision, leading to unrest in the state's Hindu-majority region of Jammu.
Hindu protestors recently carried out an economic blockade of the Kashmir valley by stopping traffic on the Srinagar-Jammu National Highway for many days.
The BBC's Chris Morris in Delhi says that the latest trouble comes after years of relative calm.
Our correspondent says that the deterioration in communal relations are extremely worrying developments for the Indian authorities.