Union Home Minister Rajnath Singh rang up Chief Minister TR Zeliang to enquire about the law and order situation in the state.
"Keeping in view the sentiments of people, and the prevailing situation, the state cabinet decided to ask the State Election Commission (SEC) to withhold the ongoing process of elections to the ULBs," an official release said.
Subsequently, State Election Commissioner Sentiyanger Imchen directed to withhold the ongoing process of elections to 12 ULBs where polling was supposed to be held today.
In Dimapur, two persons were killed and at least three were injured as a crowd gathered near the private residence of Zeliang and the police tried to stop them last night.
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In interior Longleng, seven were injured after police opened fire in order to prevent a mob from entering the office of the deputy commissioner in the evening, officials said.
The clashes began following the goverment's decision to hold ULB elections despite opposition by tribal bodies.
However, despite the boycott call by the tribal organisations, polling for nine Town Councils were held without any disturbance, the officials said.
The cabinet also decided to set up a judicial commission to probe the incidents leading to the deaths and injury to others at Dimapur and Longleng last evening and payment of ex-gratia to the victims.
Meanwhile, CMO officials said that Union Home Minister Rajnath Singh called up the Chief Minister and told him that the decision to fulfil the constitutional obligation of holding elections to the civic bodies was not wrong.
Nagaland Governor PB Acharya, presently in Itanagar for his additional gubernatorial assignment, also rang up the Chief Minister and conveyed his concern on the turn of events.
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Different organisations enforced bandhs in Phek, Tuensang, Mokokchung, Longleng and Wokha districts.
The mob damaged polling materials of all the 11 polling stations in Longleng, while the police fired in the air to disperse a rampaging group of people, officials said.
Mobile data services have been suspended in the state since last night till the situation was brought under control.
The demand was made by the Joint Coordination Committee (JCC), comprising Naga tribal organisations, during the send-off service of the two deceased in Dimapur.
JCC representative Vekhosayi also demanded suspension of the police personnel "involved in the indiscriminate firing", along with the Dimapur Police Commissioner.