Tension has been growing between the two communities this year, with some hardline Buddhist groups accusing Muslims of forcing people to convert to Islam and vandalising Buddhist archaeological sites.
Some Buddhists nationalists have also protested against the presence in Sri Lanka of asylum seekers from mostly Buddhist Myanmar’s persecuted Rohingya Muslim minority.
Police said the late Friday violence in the southern coastal town of Ginthota was triggered by rumours and fake messages on social media.
“This was a clash between a small fraction of extremists in the both ethnic groups,” police spokesman Ruwan Gunasekera told Reuters.
One of those arrested was a woman who falsely spread news that Muslims were about to attack a Buddhist temple, he said.
“We’ve decided to arrest those who have been spreading false messages and rumours on social media.”
Buddhists make up about 70 percent of Sri Lanka’s population of 21 million, compared with about 9 percent for Muslims.
President Maithripala Sirisena’s government, after came under fire from rights groups and diplomats for not doing enough to crack down on hardline Buddhist groups, acted against anti-Muslim attackers in June this year.
That action came after more than 20 attacks on Muslims, including arson at Muslim-owned businesses and petrol-bomb attacks on mosques, were recorded in two months.
In 2014, three Muslims were killed in riots stirred up by hardline Buddhist groups.