Police in Godhra, where last year's bloodshed erupted, fired four rounds into the air to break up the clash.
An indefinite curfew had been imposed in the area. The seven people were hurt when rival groups threw stones at each other, police said.
"There is some tension, we have rushed in additional forces," Gujarat state police chief K. Chakravarthy told Reuters.
Police later said the situation was under control and there were no disturbances elsewhere in the state.
The violence began when Muslims threw stones at a Hindu religious procession after some of the Hindus had shouted provocative slogans against Muslims, he said.
The incident took place near the Signal Falia area of Godhra.
On Friday, Hindus were taking a statue of Ganesha in a procession at the end of an annual festival.
Muslims make up 12 percent of India's billion-plus population.