Hundreds of devout Hindus are taking part in the traditional fire ritual at Kulgam's Mata Katyayani Temple.
The ritual is being performed after more than two decades.
The temple, revered by Kashmiri Hindus, is located in village Kakran, around 55 kilometres from Srinagar.
The temple was ravaged during early 1990s when militancy was at the peak and it was reopened after renovation undertaken by All Parties Migrants Coordination Committee with the active patronage of Muslims.
Muslims termed the occasion as memorable since they are also observing the fast during holy month of Ramazaan.
Vakil Ahmad, a Muslim, said: "Those people who lived here have come back and are also meeting their Hindu old friends who are also here for the religious ceremony. We are telling them to return and once again live happily in the same spirit of brotherhood which they enjoyed earlier. Even though it's the holy month of Ramazaan, we are delighted to a part of the celebrations here and feel comfortable. Indeed, it looks like the same atmosphere of camaraderie is coming back in the valley."
Vinod Pandit, Chairman of All Parties Migrants Coordination Committee, said: "When I came here three years ago, I saw that there was an area of the temple which had been completely destroyed by anti-social elements in 1992. There was a (Sarai) (community hall for visiting devotees to rest) here. There was nothing here when I came in 1992, the temple had been destroyed, and then it was rebuilt by the APMCC (All Parties Migrants Coordination Committee). Today, after 23 years we are performing a Maha Yagna (mega fire ritual) at our Mata Katyayani Temple."
Hindu and Muslims prayed together in the temple for restoring peace and prosperity in the region marred by various militant activities of religious extremists who do not refrain from killing innocents.