Hours after the rally in Srinagar on Wednesday, Sayeed had received a phone call from Home Minister Rajnath Singh asking him to take "immediate and stringent" action against the law breakers.
The Home Minister today asserted, "We will not tolerate anyone raising slogans like 'Pakistan zindabad' on Indian soil.
"There can be no compromise on national security. Politics cannot impinge on national security," he told Sayeed.
During the rally, separatist Masarat Alam, released from jail last month, praised founder of Lashker-e-Taiba terror outfit Hafeez Mohammed Sayeed and asked people to join hands with his outfit.
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Pushed on a backfoot, Sayeed tried to defend his decision of giving permission to the rally but made it clear that hoisting of Pakistan flags and raising pro-Pakistan slogans "is not acceptable and will not be tolerated."
"As far as the public meeting is concerned, I think it is okay. As I say, democracy is a battle of ideas. They are free to have their own way, speak their own mind but something which is not acceptable (hoisting of Pakistan flag or raising Pakistan slogans) will not be tolerated.