The situation unfolded after a fight between a young Sinhalese-Buddhist driver and four Muslims, who were traveling in a trishaw, had snowballed into a volatile situation following the death of the former.

According to reports, the van driver who was mauled by the four Muslims with iron bars, succumbed to his injuries after receiving treatment in the Intensive Care Unit for three days.

In spiralling violence since then, at least four people were killed while several properties, including shops and mosques, sustained damages in some parts of Kandy district.

Later, a fresh wave of violence was triggered  following a grenade explosion in Katugastota on Wednesday.

To uphold law and order, the government has deployed more troops in Kandy, which houses a population of over 75 percent of Sinhalese Buddhists.

Sirisena has also held discussions with leading Buddhist monks and Islamic Moulavies and has urged them to appeal for peace among the people.

He has also instructed the military and police officials to take necessary security measures to ensure national security.

Following the recent clash, more houses, shops and mosques in Kandy were set ablaze, escalating the tensions. The government has set up a 24-hour helpline for the people to report any acts or threats that trigger violence to disrupt national security.

The schools in Kandy, according to the Ministry of Education, will remain closed indefinitely.

Prime Minister Ranil Wickremesinghe has issued a special statement assured that volatile situation would not spread islandwide as security had been tightened.

“Police, STF and Army deployed in the Kandy District have been directed to contain and respond to any clashes or violent situations,” he announced.

Appealing to all communities to remain calm and support the authorities to maintain peace, he said that the government took a decision to block social media sites to prevent people from being ‘incited into more violence by extremist elements’.

Since May, 2009 after ending the civil war, this is the first time that Sri Lanka has declared the state of emergency.

Police spokesman Ruwan Gunasekara told the Just Earth News that seven people have been arrested so far. “Three police officers are also injured while they were trying to control the clashes. We still don’t have figures of people who are injured in these clashes,” he said.

Chief of Defence Staff Admiral Ravindra Wijegunaratne said that over 600 army troops had been deployed in the area to control the situation.

“The people who are behaving violently are unarmed and the situation of communal violence is very different from a warring situation. We are using minimum force to control them,” he told the reporters.

Cabinet spokesperson Minister Dr. Rajitha Senaratne said that the government has information of a political party, which has involved in the violence and attacks to Muslims.

“They have a political agenda in this and we will reveal their names soon,” he said.

Police spokesman said that the four Muslims were taken into custody and investigations are going on.

Meanwhile, Sri Lanka's former iconic cricket captain, Kumar Sangakkara, has appealed to people via social media.

"No one in Sri Lanka can be marginalized or threatened or harmed due to their ethnicity or religion. We are One Country and One people. Love, trust and acceptance should be our common mantra. No place for racism and violence. STOP. Stand together and stand strong," he said.