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Hindus and Muslims have clashed in the Indian state of Haryana a week after violence erupted during a Hindu procession in a Muslim neighbourhood, with a tomb and several vehicles torched and shops ransacked, police said on Monday.

At least seven people have been killed in the clashes, including the cleric of a mosque set on fire last week in the district of Gurugram.

The violence has been spreading with the latest beginning on Sunday and continuing into early Monday when several people set fire to a Muslim tomb, police officials said.

No one was hurt, they said.

"There have been three incidents of shops being vandalised in the district. Six people have been arrested," said Mayank Mishra, assistant superintendent of police in Panipat district, 200 km away from where the trouble began last week.

Tension between members of India's majority Hindu community and minority Muslims has periodically flared into deadly violence for generations.

The latest trouble comes as some members of the Muslim community say they are unfairly treated by the government of the Hindu nationalist Bharatiya Janata Party, led by Prime Minister Narendra Modi. The government rejects the accusations.

Despite the latest trouble, the district magistrate of business hub of Gurugram lifted prohibitory orders in place since last week, saying that "normalcy has returned".

But for many Muslims the clashes have brought fear.

Some have left towns to return to their villages or have gone to live with friends and relatives in other areas, media has reported.

Some Muslims in Gurugram say men have been coming to their communities and threatening them with violence unless they leave.

"They told us to get out of our house or they'll burn it down. We are leaving because we're afraid," resident Amuta Sarkar, told the ANI news agency, in which Reuters has a minority stake.

In a related development, the Punjab and Haryana High Court stepped in on Monday to block the demolition of a community of several hundred dwellings in the district of Nuh, where the violence began last week, legal news website LiveLaw reported.

Police said the people who attacked the Hindu procession came from the settlement of "illegal" structures.

"The demolition campaign has been stopped," the Nuh administration said in a statement. (Reuters)