The mosque in Karubaga in Tolikara district was destroyed on Friday during the Muslim Eid al-Fitr holiday along with 60 kiosks.
One person was reportedly killed and 11 injured in the incident. The president Joko Widodo met with cabinet ministers and security leaders on Wednesday and has ordered a thorough police investigation.
The leaders also called for talks with local religious, traditional and community leaders to ease tension in Tolikara.
The president has also ordered funding to rebuild the burned facilities.
According to the Jakarta Post, police say individuals had been provoking a group of about 200 people who pelted stones and set fire to shops owned by Muslim migrants while they were away taking part in mass prayers.
Antara News reports the Home Affairs Minister Tjahjo Kumolo visited Tolikara on Tuesday and said the area was peaceful.
He said work was underway to clean up the debris left from the attack.
The newly-installed military commander Gatot Nurmantyo emphasised the need for respect among different religious groups, saying the nation was built on the principle of "Unity in Diversity".
Earlier Papua's governor, Lukas Enembe, said the Tolikara incident was an isolated case, while the Coordinator of Papua Peace Networks, Neles Tebay, called for sympathy and serious attention in solving the problem of intolerance in Karubaga.
The police have been questioning witnesses to the incident.
Radio New Zeland