Oz police scouring suburb for race-rioters.
"Let's be very clear, the police will be unrelenting in their fight against these thugs and hooligans," New South Wales state political leader Morris Iemma said.
Racially motivated rioting erupted yesterday after thousands of drunken white youths attacked police and people of Middle Eastern appearance at Cronulla beach. It spread later with retaliatory attacks by groups of youths of Arab appearance who stabbed one man and smashed cars.
The violence shocked this city of four million which prides itself on being a harmonious cultural melting pot.
Prime Minister John Howard condemned the rioting, but added: "I do not accept that there is underlying racism in this country."
Iemma said Muslim leaders and community leaders from the suburbs hit by rioting would meet later in a bid to ease tensions and prevent a recurrence of the violence.
Police arrested 28 people in hours of street battles that left 31 people, including two ambulance officers and five police, injured, New South Wales police said. One man was stabbed in the back.
One lawmaker said anti-Muslim resentment that has risen since the September 11 attacks in the US and the 2002 Bali bombings in Indonesia that killed 88 Australians also played a role.
Government lawmaker Bruce Baird said many Cronulla locals were angry, particularly after six women from the area were killed in the Bali bombings. "Where this riot took place is actually the site of where we've got the Bali memorial for these women," Baird told Australian Broadcasting Corporation radio.
Asked if the rioters could have been influenced by the Bali and September 11 attacks, Baird said: "I think so." Deputy Police Commissioner Andrew Scipione said Neo Nazis were believed to be involved in fanning the violence.
"That in fact is something that we're following up," he told Australian television's Nine network.
A day of confrontations began when 5,000 white youths and adults, many of them drunk, wrapped in Australian flags and chanting racist slurs, fought a series of skirmishes with police, attacked people of Arab appearance and assaulted a pair of ambulance officers in Cronulla.
The violence was a reaction to reports that youths of Lebanese ancestry were responsible for an attack last weekend on two of the beach's volunteer life guards.
One white teenager had the words "We grew here, you flew here" painted on his back.
Two paramedics in an ambulance were injured as they tried to get youths of Middle Eastern appearance out of the Cronulla Surf Lifesaving Club, where they fled