Australian Prime Minister John Howard has called for ethnic and religious tolerance in the wake of race riots in Sydney over the weekend.
There were angry confrontations between police and youths
Attacking people "on the basis of their race, their appearance [and] their ethnicity" was unacceptable, he said.
Thousands of young white men attacked people of Arabic and Mediterranean background on Cronulla Beach on Sunday.
The fighting injured more than 30 people, including police officers, and at least 16 people were arrested.
The clashes follow an assault on two lifeguards last week, reportedly by youths of Middle Eastern origin.
Mobile phone text messages began circulating after the incident, encouraging people to retaliate.
Their revenge began on Sunday afternoon, when thousands of white youths converged on Cronulla Beach.
Chanting "No more Lebs [Lebanese]" and "Aussie, Aussie, Aussie... Oi, Oi, Oi," mobs of drunken young men attacked anyone who looked like they might have come from the Middle East.
One Muslim woman had her headscarf ripped off, local media reported.
The violence then spread to other parts of Sydney, with retaliatory attacks by groups of youths of Middle East appearance, who stabbed one man and damaged dozens of cars.
Police have set up a special unit to track down those responsible.
New South Wales Police Minister Carl Scully said the trouble had been caused by a group of Neo-Nazis and white supremacists, who had stirred up the drunken crowd.
"Those sort of characters are best placed in Berlin 1930s, not in Cronulla 2005," Mr Scully told reporters.
"Mob violence is always sickening and always to be unconditionally condemned," Mr Howard told reporters on Monday.
But he insisted that the weekend's violence did not signal a deeper problem within Australian society.
"I do not accept that there is underlying racism in this country," he said.
"This nation of ours has been able to absorb millions of people from different parts of the world over a period of some 40 years and we have done so with remarkable success."
Mr Howard also denied that government warnings of home-grown Islamic militants had fuelled the riots.
"It is impossible to know how individuals react, but everything this government's said about home-grown terrorism has been totally justified," he said.
The Australian government has repeatedly warned about the risk of terrorism on Australian soil.
So far there has not been a major attack directly on the country, but Australians have been targets for militant attacks overseas in recent years, and last month 18 Muslim men were arrested in Sydney and Melbourne on terrorist charges.