Leh was an important stopover on trade routes along the Indus Valley between Tibet to the east, Kashmir to the west and also between India and China for centuries. The main goods carried were salt, grain, pashm or cashmere wool, charas or cannabis resin from the Tarim Basin, indigo, silk yarn and Banaras brocade.

Although there are a few indications that the Chinese knew of a trade route through Ladakh to India as early as the Kushan period AD and certainly by Tang dynasty little is actually known of the history of the region before the formation of the kingdom towards the end of the 10th century by the Tibetan prince, Skyid lde nyima gon , a grandson of the anti-Buddhist Tibetan king, Langdarma. He conquered Western Tibet although his army originally numbered only 300 men. Several towns and castles are said to have been founded by Nyima gon and he apparently ordered the construction of the main sculptures at Shey. In an inscription he says he had them made for the religious benefit of the Tsanpo (the dynastical name of his father and ancestors), and of all the people of Ngaris (Western Tibet). This shows that already in this generation Langdarma's opposition to Buddhism had disappeared. Shey, just 15 km east of modern Leh, was the ancient seat of the Ladakhi kings.

During the reign of Delegs Namgyal the Nawab of Kashmir, which was then a province in the Mogul Empire, arranged for the Mongol army to (temporarily) leave Ladakh (though it returned later). As payment for assisting Delegs Namgyal, the Nawab made a number of onerous demands. One of the least was to build a large Sunni Muslim mosque in Leh at the upper end of the bazaar in Leh, below the Leh Palace. The mosque reflects a mixture of Islamic and Tibetan architecture and can accommodate more than 500 people. This was apparently not the first mosque in Leh; there are two smaller ones which are said to be older.

Several trade routes have traditionally converged on Leh, from all four directions. The most direct route was the one the modern highway follows from the Punjab via Mandi, the Kulu valley, over the Rohtang Pass, through Lahaul and on to the Indus Valley, and then down river to Leh. The route from Srinigar was roughly the same as the road that today crosses the Zoji La (pass) to Kargil, and then up the Indus Valley to Leh. From Baltistan there were two difficult routes: the main on ran up the Shyok Valley from the Indus, over a pass and then down the Hanu River to the Indus again below Khalsi (Khalatse). The other ran from Skardu straight up the Indus to Kargil and on to Leh. Then, there were both the summer and winter routes from Leh to Yarkand across the Karakorum. Finally, there were a couple of possible routes from Leh to Lhasa. The first Englishman to reach Leh was William Moorcroft (explorer) in 1820.

The first recorded royal residence in Ladakh, built at the top of the high Namgyal ('Victory') Peak overlooking the present palace and town, is the now-ruined fort and the gon-khang (Temple of the Guardian Divinities) built by King Tashi Namgyal. Tashi Namgyal is known to have ruled during the final quarter of the 16th century AD.The Namgyal a temple, is the main Buddhist centre in Leh. There are some older walls of fortifications behind it which Francke reported used to be known as the Dard Castle. If it was indeed built by Dards, it must pre-date the establishment of Tibetan rulers in Ladakh over a thousand years ago.

Below this are the Chamba (Byams-pa, i.e., Maitreya) and Chenresi (sPyan-ras-gzigs, i.e. Avalokiteshvara) monasteries which are of uncertain date. The royal palace, known as Leh Palace, was built by King Sengge Namgyal (1612–1642), presumably between the period when the Portuguese Jesuit priest, Francisco de Azevedo, visited Leh in 1631, and made no mention of it, and Sengge Namgyal's death in 1642.

The Leh Palace is nine storeys high; the upper floors accommodated the royal family, and the stables and store rooms are located on the lower floors. The palace was abandoned when Kashmiri forces besieged it in the mid-19th century. The royal family moved their premises south to their current home in Stok Palace on the southern bank of the Indus.




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