Groups of people took to streets in Dawar and staged a peaceful demonstration against the alleged desecration of a holy book kept inside a place of worship, the sources said.
However, the protestors dispersed peacefully after police assured them that stern action would be taken against the culprits, they said.
The protests spread to Bandipora town also where markets were closed and residents sat on dharna, they said, adding, the situation in the area was tense but under control.
A police spokesman, confirming the desecration of a holy book in Tragbal village, said a case had been registered under section 295 Ranbir Panel Code and investigations were on.
"Senior officers are monitoring the situation which is so far under control," the spokesman said.