"Harish Kochar, a traders' leader, and an unidentified person have been killed in the clashes. A policeman has sustained bullet injury in the clashes and has been referred to PGI in a serious condition," Commissioner, Saharanpur, Tanveer Zafar Ali said.
Police used force and fired rubber bullets to control the situation as mobs went on a a rampage setting ablaze a number of shops.
He said that prohibitory orders under section 144 of CrPC have been invoked in the district and curfew has been clamped in six areas.
Tension prevailed in the district and a large contingent of security personnel including those of police, Provincial Armed Constabulary (PAC) and Rapid Action Force (RAF) has been deployed in the area and paramilitary forces have also been called.
"As per the information received so far there was a dispute over land between two communities which escalated this morning," Additional Director General of Police (Law and Order) Mukul Goel told PTI.
The trouble started when members of one community started construction work at the site in Kutubsher area in the wee hours this morning, which was objected to by the other group.
Both the sides indulged in heavy brick batting, arson and opened fire and there were reports of several shops being gutted in the clash, police said.
Even as curfew has been clamped, sporadic incidents of clashes were reported.
The ADG said senior officers were camping in the area.
Saharanpur is nearly 170 km from national capital Delhi and 560 km from state capital Lucknow.