Local surfers and beachgoers - the majority of them young, white men - rallied at Cronulla beach on Sunday a week after two lifesavers were attacked by a group of youths from Sydney's western suburbs.
The attack was thought to have been carried out by a gang of Middle Eastern origin.
As the crowd moved along the beach foreshore, one man on the back of a truck shouted: "No more Lebs [Lebanese]," a chant picked up by the group around him.
Others carried Australian flags and dressed in Australian sports shirts, yelled: "Aussie, Aussie, Aussie ... Oi, Oi, Oi."
Reports said the chanting quickly descended into clashes as the crowd began drinking heavily and targeted people of Middle Eastern appearance.
At one stage, an ambulance taking people to hospital was pelted with bottles of beer.
Youths damaged cars in at least one nearby suburb and a man was stabbed after what a police spokesman described as a short conversation with a "group of males of Mediterranean or Middle Eastern appearance".
The victim was hospitalised in a serious condition.
A news report, not confirmed by police, said that a girl of Middle Eastern appearance had been pushed over and repeatedly kicked as she lay on the ground.
The violence started at the
popular Cronulla beach, Sydney
Mark Goodwin, the police assistant commissioner, said: "The behaviour that has been seen down here at Cronulla today is nothing short of disgusting and disgraceful. It is certainly not the Australian way."
The rioters were overwhelmingly young, white men and many carried beer bottles and waved Australian flags.
Earlier text messages had circulated urging people to rally at the beach on Sunday following the attack on the two lifeguards.
One of the messages urged "Aussies" to take revenge against "Lebs and wogs". It said: "Bring your mates and let's show them that this is our beach and they are never welcome."
Police had been bracing for trouble and had earlier issued a stern warning that "no one owns the beach" in an effort to stop a vigilante response to visitors.
"The behaviour that has been seen down here at Cronulla today is nothing short of disgusting"
police assistant commissioner
Sydney's Muslim community blamed the violence on "racist and irresponsible" sections of the media which had turned a common youth issue into an issue of ethnicity.
The president of the Islamic Friendship Association of Australia, blamed callers to talk radio stations for fuelling the violence.
Keysar Trad, said the violence was "bound to happen" after callers to some radio talk shows whipped up ethnic tensions following the attack last weekend.
"Sections of the media took this issue far too far, and one can only surmise that the way (these) issues was dealt with on talk-back radio amounts to incitement," Trad said.
State police chief Commissioner Ken Moroney promised to
target people who fuelled the ethnic tensions.
"Clearly there has been a level of racial vilification ... and those who are found to behave this way will be prosecuted," he said.
Kevin Schreiber, the local mayor, accused the mob of flocking to the beach looking for a fight.
"As mayor and as a resident of Cronulla, I'm devastated by what has occurred on our beachfront," he said. "It is the actions of a few, but let's not kid ourselves that people didn't come from far and wide to participate."