Hurriyat chairman Syed Ali Shah Geelani said dialogue could start only when the Union government accepts a five-point proposal.
BJP national general secretary Ram Madhav Madhav appealed to the family members of Geelani to join the political mainstream.
People remained confined to their houses on Tuesday.
The separatists say that by denying them a level playing field, the government has conceded defeat.
Geelani said that there were ‘thousands of such cases where justice has not been meted out yet’.
Security has been tightened across the Srinagar city. Barricades have been put at various places in the city.
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Hardline Hurriyat leader Syed Ali Shah Geelani has called for unity among separatists.
Hurriyat chairman Syed Ali Shah Geelani said the Centre’s decision was a “vindication” of the separatist position.
The letter ended, “Nobody cares, nobody listens, it starts in Kashmir and ends up there, no where in the world cares.”
Geelani asked people to contribute towards Tehreek-e-Hurriyat, the separatist organisation founded by him.
The Hurriyat chairman said his separatist amalgam would soon start consultations with other separatists to build a “national consensus” over the issue.
In October 2010, he was arrested after police raids across Kashmir. Since then, he has been behind bars.
Several panchayat members revealed their decision at Srinagar’s press enclave Monday, where they were protesting against the government.