Katas Raj is the name of a Hindu site of pilgrimage. It is now in Pakistan. Though this place has many references to it in the purAnAs and the mahAbhArata, I got to know of this place only recently - after Advani's controversial trip to Pakistan. It is known in Pakistan as Katas (no Raj after the name)
Apparently the name kaTAs rAj is derived from kaTAkSha (meaning glance). This place is supposed to be one of the places where Lord Shiva wept out of grief on His wife's (Sati) death. The profuse tears from Shiva's eyes filled two lakes. One is the present Katas and other is a site in Ajmer. The more interesting aspect of this lake is that the Pandavas spent four out of their twelve years of exile here.
A note of clarification here - it was Lord Rama of the rAmAyaNa who was exiled for fourteen years. The Pandavas were asked to spend twelve years in exile and an additional year incognito (which they spent at virATa's kingdom).
Back to Katas, yudhiShThira, the eldest of the pANDavas, exhibited his wisdom in answering the questions of an invisible yakSha. This wise act essentially gave life to the other pANDavas who were lying dead after drinking the water of this pool.
This is a fascinating story in the mahAbhArata and is wonderfully thought-provoking. For details, go here
The temple and lake constituted a great pilgrimage centre till the Partition of India. The temple was hopelessly defaced during Muslim invasions and mainly after the partition and its picture below (from the BBC) speaks volumes about the defacement and destruction wrought upon this temple.
Below: A picture of the deity (from Outlook India) at the Katas temple
This brings to mind the thought that less than sixty years ago, this place was India too. Anybody in India could have gone there. This barrier between India and Pakistan is after all man-made. The fact that man-made barriers have caused physical and cultural damage to this extent is overwhelming.
To be fair to the Pakistani government, they want to identify this as a world heritage site and develop it further. Of course, they will get some much needed tourism money from Sindhis and other Indians for whom Katas is really important.
An informative (but in a rather condescending tone) article can be found here.
I hope the peace process between India and Pakistan goes on in a peaceful manner.