Police officials said the situation in Saharanpur city was under control but tense although there had been no major incident of violence since late Saturday night.
A curfew clamped Saturday in six police station areas of Saharanpur remained in force, an official told IANS.
Violent clashes erupted between Sikhs and Muslims on Ambala Road over a land dispute.
It quickly spread in the city, leading to arson. Groups of mostly young people fought pitched battles on the streets, using stones and bricks as weapons.
Several vehicles were burnt in the frenzy, gun shots were fired and business establishments were targeted.
An official said any decision to relax the curfew in the city of seven lakh people would be taken by the home department and the police.
With an injured man succumbing to injuries, the death toll in the clashes now stands at three, officials said.
The condition of over a dozen injured, mostly with gun shot wounds, is critical, officials said. They include a police constable and a Home Guard.
Security forces, meanwhile, deployed drone cameras to keep a vigil on "mischievous elements".
About two dozen people have been arrested.
Uttar Pradesh Chief Minister Akhilesh Yadav has sent two senior officials to camp in the violence-hit city and oversee the security arrangements.
Paramilitary forces, including the Indo-Tibetan Border Police, Central Reserve Police Force and Rapid Action Force, were deployed after Akhilesh Yadav spoke to Home Minister Rajnath Singh on telephone.
The maximum deployment has been done in areas where the population is a mix of Muslims, Sikhs and Hindus.