Detailed Explanation:

Karewas are glacial clay deposits found in the Kashmir Valley, formed through glacial action and embedded in moraines. These lacustrine sediments possess unique drainage and nutrient properties ideal for saffron (Zafran) cultivation.

Located primarily in the Jhelum Valley and parts of Jammu, Karewas are highly fertile plateaus specifically suited to saffron due to their soil composition and climate. Crops like mango, grapes, or banana are not cultivated in this region.

Therefore, Karewas are famous for saffron cultivation, making Option 1 the correct answer.