The row over whether to allocate land to a Hindu shrine in Muslim-majority Indian-administered Kashmir is unprecedented and has the potential to cause the state to fragment along communal lines.
At the end of June, the Kashmir valley was suddenly rocked by what turned into nine days of the biggest Muslim street protests seen in the region for years.
The conflagration was a setback for the Indian government which had made much of several years of relative calm in the Kashmir region.
Insurgent attacks appeared to be declining as did military exchanges with Pakistan across the Line of Control (LoC) which separates the parts of Kashmir the two countries control.
The reason for the demonstrations was a controversial plan by the Jammu and Kashmir state government to transfer land to a trust which runs the Amarnath shrine in the Muslim-majority Kashmir valley.
The protests in the valley only subsided when the government dropped the plans - but that in turn triggered equally large protests in the Jammu region in the south of the state, where the majority Hindu population was outraged.
Now it is no exaggeration to say that the state could be heading towards a communal meltdown.
That will affect the Jammu region - where Hindus comprise only a narrow majority - more than the Kashmir valley, which is now almost entirely Muslim.
Observers are almost unanimous that the land row is an effect rather than a cause of antagonism between the two regions.
They say the simmering discontent dates back to the ending of the monarchy in Kashmir after 1947.
The monarch, Maharaja Hari Singh, was a Hindu who belonged to the main ethnic Dogra community of Jammu.
"When the monarchy ended and a popular government was installed under the leadership of Sheikh Abdullah, the power base shifted to the valley of Kashmir which has a larger population than Jammu," says Professor Noor Ahmed Baba of Kashmir University.
He argues that the people of Jammu felt disenfranchised then and that feeling remains even now.
A prominent writer and social activist in Jammu, Balraj Puri, says that Hindu discontent over developments in Kashmir has often been overlooked during the years of insurgency.
"I warned [India's first] prime minister [Jawaharlal] Nehru of the consequences of the simmering discontent in Jammu soon after the state's accession to India," he said.
Mr Puri recalls telling India's first prime minister that there was a perception among Hindus in Jammu that they wielded little power in the state of Jammu and Kashmir as the minority population - and what leadership they did have was remote and inaccessible.
Today those feelings of resentment are still evident.
"It's ironical that Kashmiris who don't even consider themselves to be Indians are getting all the blessings of the government, while the people of Jammu are always treated as second [class] citizens," said one Hindu in Jammu.
At the same time, the majority Muslim population also has a deep sense of insecurity.
They now believe that the only way they can preserve their identity and avoid being swallowed by the huge Indian population is by retaining control of their land.
Last year, they forced the state government to withdraw a proposal to allow non-Kashmiri investors to bid for plots of land on which to build hotels at the tourist resort of Gulmarg.
It was felt that this might open the floodgates for outsiders to settle down in the valley.
Kashmiri leaders have also, on many occasions, voiced their concern over what they say is the steady decline of the Muslim population in the Jammu region.
They have blamed this on people from neighbouring states settling down in the region.
In 1982, while Sheikh Abdullah governed the state, his National Conference party brought out a red book titled "Conspiracy to reduce the majority community in Jammu and Kashmir into a minority".
Prof Noor Ahmed Baba says the people of Kashmir will be at peace with themselves and others only after the question of the state's future has been effectively addressed.
Equally important, he says, is to work out a relationship among the various regions of the state so that there are no suspicions of one region dominating another.
He says that matters are not helped by the Hindu nationalist Bharatiya Janata Party (BJP) and similar organisations which are in the forefront of the continuing protests in Jammu.
Many in the valley argue that these groups have a barely concealed anti-Muslim agenda.
But, Balraj Puri says, it is because of opposition from these parties that Jammu has missed out on regional autonomy - accorded to people in the Kashmir valley as part of the state's special status within the Indian constitution.
The Hindu groups twice vetoed offers of autonomy for Jammu - first by Sheikh Abdullah in the 1950s and again in 1996 by Farooq Abdullah - because they have also opposed the special status of the state.
The Hindu groups have always demanded abrogation of Article 370 of the Indian constitution which gives special status to the state.
Meanwhile, the trouble in Jammu and Kashmir is worrying the Indian government.
After almost two decades of separatist violence, the situation in the Kashmir valley had improved in the past few years.
Violence was on the decline and hundreds of thousands of tourists had returned to the valley, rekindling hope that Kashmir may be on the path to peace once again.
But the latest violence by Hindus and Muslims seems to have dashed that hope.