I am working on a web project. I want to implement same in ruby. I am aware of the ruby frameworks like merb, sinatra. Just I want to know which is most suitable framework for developing web based application using ruby ?
ruby on rails (rubyonrails.org) is probably the easiest and best, but pretty much all frameworks these days provide the same functionality.
They're all web frameworks, so all are suitable. As to which one is best, that's a subjective topic at best. I would try Ruby on Rails because it has the largest community, which can be a godsend when you're building applications.
Rails is the oldest and most mature of all, and it has quite good documentations and books. It is not considered lightweight though, and has a lot of dependencies / included stuff you might not want to use. Merb is more lightweight, has a plugin architecture, and is somewhat cleaner, but it's doumentation is almost non-existent, and searching for merb based stuff on the net will get you 0.x based answers, from which most of are out of date.
If you're starting with ruby based web projects use rails. After a I while I recommend switching to merb, because it's more cleaner, but only if you don't care about crappy documentations.
Ultimately rails 3 and merb 2 will merge, that might bring you the best of both worlds...
If the job market is a concern to you, then go with Rails. You won't find many Ruby job postings for any other frameworks.
Ruby on Rails and Merb.
And later on Rails3 (Merging of Ruby on Rails and Merb)