Atleast 40 Kashmiri porters with horses were injured after extremist Hindus resorted to violence during the Amarnath Yatra.
Eyewitnesses said that the argument began over transactions but soon took the shape of a religious conflict.
The conflict becamke so intense that 300 tents were set on fire and 10 cooking stations were also destroyed.
Onlookers said that Hindu pilgrims ganged up on the horsemen and attacked them. Meanwhile, the police looked on without doing anything.
As a protest, the horsemen have suspended their services to the pilgrims.
Analysts say that the incident is just another episode of rising religious extremism in India that routinely manifests itself as violence against the Muslim minority. Kashmir, with its disputed status is especially a flashpoint for such clashes.
The Amarnath Yatra is an annual pilgrimage that began on July 1 and will go on till August 31.