Ok.  I tried renaming the .mozilla folder to .mozilla_old and started firefox. 
Still it did not help. 
I removed firefox installation by apt-get remove firefox. Deleted the .mozilla 
folder. Then installed again by apt-get install firefox.
Then tried to create a new profile. But it still hangs.

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Firefox gives blank page on statrup with an OK button
https://bugs.launchpad.net/bugs/258987
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