Large areas have been devastated by the rioting
Mobs of Hindus and Muslims have returned to the streets of some of Gujarat's main towns.
Prime Minister Atal Behari Vajpayee has denounced the violence - in which at least 350 people are now known to have died - as "a disgrace to the nation" and urged calm.
"Whatever the provocation, people should maintain peace and exercise restraint," he said on state television.
"The burning alive of people, including women and children, from Godhra to Ahmedabad and other places is a blot on the country's face."
Trail of destruction
But Mr Vajpayee's appeal appears to be falling on deaf ears.
In the town of Baroda at least seven workers in a bakery died when it was set alight by an angry crowd.
In the town of Surat, a gang went on the rampage, setting petrol stations on fire. It then attacked a television station, killing at least four workers there, a police source said.
And in the town of Surendra Nagar, Hindu rioters have left a trail of destruction, the source said.
Police have admitted that security problems in outlying villages, where there have been a number of massacres, are intense.
Curfews are being enforced in more than 30 areas.
A Reuters journalist in the town of Naroda saw graffiti saying: "Learn from us how to burn Muslims."
One man told him: "Whatever happened is good. The only way to end this problem is by destroying [the Muslims]."
He says fires are still burning two days after a Hindu mob attacked a Muslim area.
Revenge
The violence began on Wednesday, when Muslims attacked a train in the town of Godhra that was carrying Hindu activists, killing nearly 60 of them.
That triggered revenge attacks in Ahmedabad and other areas.
Tensions between Hindus and Muslims have been building because the VHP wants to begin building a temple at Ayodhya, on the site where supporters of the VHP and other Hindu groups razed a mosque in 1992.
That triggered savage rioting throughout India in which more than 2,000 people died.
VHP defiant
The dispute over the construction of the temple has been a divisive issue in Indian politics ever since.
The VHP issued a defiant challenge to the federal government on Saturday, saying Prime Minster Vajpayee's appeal to postpone the construction of the temple was unacceptable.
A senior VHP leader, Ram Chandra Pramhans, told the BBC that VHP activists were prepared to face arrest by security forces trying to stop them reaching Ayodhya.
In the city of Bombay, more than 80 Hindu hardliners were prevented by police from boarding a train to Ayodhya.
But they remained defiant.
"We have our own means of reaching the temple spot. Nobody can stop us," Shankar Gaiker told the Reuters news agency.
Thousands of hardline Hindus are camped out in Ayodhya, with many saying the temple is a life-or-death issue for them.
"We will all die now if anyone comes in the way of the temple construction," Laxmi Das told the AFP news agency.
'More confidence'
Earlier on Saturday, police in Gujarat's biggest city, Ahmedabad, said the situation there had been improving.
But reports say many residents are too scared to venture outside their homes.
About 80 Muslim residents of one apartment block said they had gone without food for three days.
The Home Secretary of the Indian state of West Bengal, Amit K Deb, has denied that two militants recently arrested are being held in connection with the arson train attack at Ghodra last Wednesday.