Unidentified people set ablaze the palace, which is located at Nakasongola district headquarters at around 3am on Sunday. Part of the same palace was gutted by fire in August 2016.
Buganda chiefs have pointed accusing fingers at Buruuli chiefdom officials in both incidents- a charge they have vehemently denied.
On Tuesday, a group of Buganda loyalists led by Gerald Kyanjo, the Kabaka's representative in Buruuli County alias Kimbugwe started fencing off the land on which, the burnt palace was built.
Kyanjo told URN that they are currently fundraising and mobilizing well-wishers to build a better palace for the Kabaka. He disclosed that they intend to raise more than Shillings 300 million to erect permanent structures.
Abbas Luninze, the Speaker Buruuli County council has asked the Central government to restrain Buruuli Chiefdom loyalists from acts of provocation, saying it may lead to violence.
But Samuel Kaweesi, the spokesperson of Buruuli Chiefdom, says they agreed with Mengo officials and Police to erect temporally structures to accommodate Kabaka Mutebi during his visit in 2015, which wasn't done.
He says the land where the palace is being built belongs to Buruuli chiefdom.
Nakasongola authorities have declined to comment on the renewed protests. Sam Kiguli, the Nakasongola LC V chairman, told URN they were still consulting on the matter.
URN has also learnt that Security Minister, Lieutenant General Henry Tumukunde has reached to both parties and asked them to remain calm as he prepares to meet them for dialogue.
-URN