Muslim and political leaders condemned the violence, which was started by mobs of youths who attacked people of Middle Eastern appearance on Cronulla beach in south Sydney on Sunday.
More than 5000 people gathered at the beach after email and mobile phone text messages called on local residents to beat-up "Lebs and wogs", racial slurs for people of Lebanese and Middle Eastern origin.
The violence came after assaults a week ago on two volunteer lifeguards at the beach, which is a popular gathering place for Muslims from inner-city suburbs, and allegations that local women were being harassed.
Chanting "No more Lebs" and "Aussie, Aussie, Aussie ... Oi, Oi, Oi", mobs of drunken young men waving Australian flags attacked anyone suspected of having a Middle Eastern background.
One Muslim woman's headscarf was ripped off and another was chased into a beach kiosk, local media reported.
Six police officers were injured as they tried to quell the violence, and two ambulance officers were also hurt.
Later, a gang of about 60 men reportedly of Middle Eastern appearance, carried out a series of apparent revenge attacks in nearby suburbs, smashing more than 40 cars with baseball bats and stabbing two youths.
Police arrest a youth in Sydney
(Picture: Sky News)
Morris Iemma, the premier of New South Wales, described the violence at Cronulla beach as "stomach turning".
"I saw yesterday people trying to hide behind the Australian flag; well they are cowards whose behaviour will not be tolerated," he told Channel Nine television.
Iemma said he planned to bring together community leaders to discuss how to prevent further violence.
Ken Moroney, the police commissioner, said: "It's not Australian to adopt a mob mentality and then, among other things, assault women - I have never in all my life known of anything that's so un-Australian."
Keysar Trad, the president of the Islamic Friendship Association of Australia, called on the police to "use the full extent of the law on these criminal thugs who behaved in the way that they did".
Kuranda Sevit, the director of the Forum on Australia's Islamic Relations, said in a statement: "We have over 3000km of beaches on the east coast, there's plenty of sand and ocean there for everyone.
"What happened to the Australian idea of a fair go and tolerance?"