The minister told the Rajya Sabha that the situation in violence-hit Jammu region has been brought under control.
Chidambaram said the time was not right for BJP leader Arun Jaitley to visit the area, and urged restraint from political leaders till the situation returns to normalcy.
"Two Muslims and a Hindu have died in the clashes. All of us are Indians. Three Indian lives have been lost and that is a matter of great regret," Chidambaram said.
"We will not allow a repetition of 1990. We will not allow forced migration. We will not allow forced resettlement. Everybody will be protected in the area in which he or she lives," he said.
The exodus of Kashmiri pandits from the Valley started in 1990 soon after the outbreak of insurgency in the state.
The minister said that arrests have been made and the situation was under control after the army took out a flag march in the evening of Aug 11. Tension in adjoining areas are also in control, he said.
Chidambaram's comments came as several members, including BJP leader of opposition Arun Jaitley, expressed fears that violence in Jammu may lead to a situation similar to 1990.
As Jaitley questioned his detention at Jammu airport by the Jammu and Kashmir government, Chidambaram defended the move saying the time was not right for the opposition leader's visit.
"The district administration decided that the time was not appropriate for the leader of opposition to visit (Jammu)," the minister said.
He said using Section 144 (of the Indian Penal Code that prohibits unlawful assembly of people) was at the discretion of the state government and the district magistrate.
When BJP leader Ravi Shankar Prasad asked if a leader like Jaitley should have been stopped, Chidambaram said: "Section 144 is status-neutral, gender- and caste-neutral. The decision lies with the district administration".
"Once the situation returns to normal, the government of Jammu and Kashmir will certainly allow political leaders to visit and meet the people," he added.
The finance minister was speaking after a discussion on last week's riots in Kishtwar town. He made the statement as Home Minister Sushilkumar Shinde was unwell.
--IANS (Posted on 12-08-2013)