"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 Sunday after thousands of drunken white youths attacked police and people of Middle Eastern appearance at Cronulla beach in southern Sydney. It spread later with retaliatory attacks by groups of youths of Arab appearance who stabbed one man and smashed dozens of cars.
The violence shocked this city of 4 million which prides itself on being a largely harmonious cultural melting pot.
Sydney's Daily Telegraph tabloid's front page headline, over a picture of white youths attacking a man of Arab appearance on a train, read: "Our disgrace."
Iemma said the riots, "showed the ugly side of racism in this country."
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 Monday 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 in a statement. One man was hospitalized after being stabbed in the back.
One lawmaker said anti-Muslim resentment that has risen since the Sept. 11 attacks in the United States 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 Corp. radio.
Asked if the rioters could have been influenced by the Bali and Sept. 11 attacks, Baird said: "I think so."