The riot which erupted Sunday night was sparked by allegations that a 17-year-old Aborigine, Thomas Hickey, died while being chased by police.
Rioters set fire to a train station at the height of overnight rioting that stretched into Monday morning in the Redfern neighborhood of Australia's most populous city. Hundreds of police in full riot gear doused the rioters with high-pressure water hoses during the clashes.
But with respected Aboriginal elders urging calm in the community, there was no repeat of the violence late Monday. Aborigines held a barbecue and stood around fires, but there were no clashes with the handful of police watching them.
Hickey's mother claimed Monday that her son died after he fell from his bicycle and was impaled on a fence while being chased by police on Sunday.
"It's got to stop, the way they treat our kids," Gail Hickey said. "They treat our kids like dogs ... they manhandle them."
Police denied they were chasing the teen.
The hospitalized police officers mostly suffered broken bones, and one officer was knocked out after being hit by a flying brick. All but one of the police officers had been released by Monday afternoon. There was no immediate word on injuries to rioters.
Four alleged rioters were arrested and charged with involvement in the fighting. Assistant commissioner Bob Waites said police had identified other rioters and expect to make more arrests in coming days.
New South Wales Premier Bob Carr ordered an investigation into the cause of the riot and said the state coroner would probe Hickey's death and any possible police involvement.
During the overnight rioting, about 100 attackers set fire to the Redfern railway station, torched a car and smashed windows.
"They burnt out one vehicle and they in fact were throwing Molotov cocktails both at police and at Redfern railway station during the course of the riot," Waites said.
Television reports showed young men surrounding a police patrol car and slamming bricks into it from close range. It was not clear if there were officers in the car at the time.
Waites also accused the rioters of stockpiling garbage bins full of paving stones and beer bottles to throw at police.
Aboriginal community leader Lyle Munro said anger in the community had been simmering long before Hickey's death.
"These young people are very, very upset about what happened to this young man, and they're very upset about what's happening to their young friends on a continual basis," Munro told Sydney radio station 2UE. "It was a preventable death, like most of the deaths of young Aboriginal people today."
Munro accused police of harassing people living in the squalid grid of run-down houses known as "The Block."
"This is an everyday occurrence — the harassment and intimidation of our young people," he said. "You could interview every Aboriginal kid down there that comes from The Block, that comes from this area in Redfern in particular, and the majority will tell you to your face ... that they've all been bashed by the police."
Aborigines make up 400,000 of Australia's 20 million people. They are the poorest, least healthy and most imprisoned members of society.
The houses were bought for Aborigines in the 1970s with a grant from the federal government in an attempt to alleviate homelessness and other social problems among Sydney's Aboriginal population.
However, the streets quickly degenerated into a garbage-strewn slum that is home to heroin addicts, alcoholics and petty criminals. Authorities are now redeveloping the area, but its social problems remain. The Block is notorious for the heroin dealers who trade openly in a park next to the railway tracks.
State opposition leader John Brogden said he would knock down The Block if he were in power.
"The fact that 40 or 50 police were injured whilst they stood there and copped it from young Aboriginal thugs and others is an unacceptable position going forward," Brogden said. "I'd bring the bulldozers in because I think allowing this to happen every couple of years, which is what's going to happen, will never fix the problem."
By Mike Corder