Last December the Allahabad High Court said the land should be divided and that the razed 16th Century Babri Masjid should not be rebuilt.
Hindu and Muslim groups appealed against that verdict, which the court on Monday described as "strange".
This case was launched well before 1992 and centres around who owns the land.
But the destruction of the mosque sparked off some of the worst communal violence in recent Indian history - nearly 2,000 people died in subsequent religious riots across the country.
In December's ruling the Allahabad court said that the site should be split, with the Muslim community getting control of a third, Hindus gaining control of another third and the remainder going to a minority Hindu sect, Nirmohi Akhara, which was one of the early groups to pursue a share of the land in the case.
On Monday, the Supreme Court put the judgement on hold, saying it was "strange". It also said that the division of the disputed land has "opened a litany of litigation".
Hindus claim the site of the Babri Masjid is the birthplace of their deity, Ram, and want to build a temple there.
Muslim groups have argued that the Allahabad court's ruling appeared to be based not on evidence but on the professed beliefs of Hindus.
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