The violence was sparked by the group Bodu Bala Sena (BBS) or Buddhist Task Force holding a rally in the area.
Following the rally where inflammatory speeches were made, mobs went berserk and torched dozens of houses and shops in the area.
Curfew had to be imposed for nearly three days before the situation could be brought under control.
President Rajapaksa has repeatedly pledged to take legal action against perpetrators of ethnic clashes and in several public speeches called on citizens to excise restraint.
"We will bring the people who caused this harm to justice," he assured residents, requesting them to support repair efforts carried out by the army.
On Thursday the government allocated 200 million rupees ($1.5 million) to repair and reconstruct shops and houses of both Muslims and Buddhists damaged in the clashes.