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At least three police were wounded in the overnight clashes at Menikhinna, a suburb of Kandy, which has been a focus of the new trouble, police spokesman Ruwan Gunasekera said.
Seven people were arrested for breaking the curfew and trying to cause unrest in the multi-ethnic district, which is a popular tourist destination.
Schools across Kandy, 115 kilometres (72 miles) east of Colombo, remained closed Wednesday as the government ordered more troops to reinforce police and stop the unrest spreading.
Foreign governments issued travel warnings following Tuesday’s declaration of a state of emergency which gives sweeping powers to police and security forces to arrest and detain suspects.
“The state of emergency may include curfews in specific locations,” the British government said. “You should exercise caution, avoid protests and rallies, and comply with local security requirements.”
The US State department told its citizens that further incidents were possible and advised those visiting the island to monitor local media for updates.
More than 150 homes, shops and vehicles were set ablaze during two days of rioting. Two people were also killed in the unrest.
Tensions rose on Tuesday as the body of a 24-year-old Muslim man was pulled out of a burnt building.
Sri Lanka’s parliament Tuesday issued an apology to the Muslim minority, which constitutes 10 percent of the country’s population of 21 million.
“We want to apologise to the Muslim community for the inhuman acts that have taken place,” state enterprise development minister Lakshman Kiriella said in parliament.
City planning minister Rauff Hakeem described the riots as a “monumental security lapse” and recommended disciplinary action against those responsible.
Riots erupted on Monday after a man from the mainly Buddhist Sinhalese majority died at the hands of a Muslim mob last week.
Mobs set fire to Muslim-owned businesses and attacked a mosque in the east of the country last week after a Muslim chef was accused of adding contraceptives to food sold to Sinhalese customers.
Last November riots in the south of the island left one man dead and homes and vehicles damaged.
In June 2014 riots between Buddhists and Muslims left four dead and many injured. That bout of violence was instigated by a Buddhist extremist group whose leaders are on trial, accused of spurring religious conflict.
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