We have developed a system for analysing hand tremors using a deformable object manipulation in a haptic environment. The subject performs some specific manipulative tasks, like moving a soft object from one location to another, in a virtual 3D environment using a haptic device. While the task is being performed, the velocity of hand movement is sampled by the haptic device and this is later processed for tremor analysis. To validate the efficacy of this system and to compare it with standard methods of tremor analysis using accelerometers, we have simultaneously collected velocity data through accelerometers and compared our results with those obtained from the accelerometer based method. We have designed the necessary haptic rendering system as well as the signal analysis schemes to build the complete system.