In one of Australia's worst outbursts of racial violence, thousands of drunken white youths attacked police and people they believed were of Arab descent at a Sydney beach, angered by reports that Lebanese youths had assaulted two lifeguards.

Young men of Arab descent retaliated in several Sydney suburbs, fighting with police and smashing 40 cars with sticks and bats, police said. Thirty-one people were injured and 16 were arrested in hours of violence Sunday.

The city was calm Monday, and police formed a strike force to track down the instigators, some of whom were believed to be from white supremacist groups. Police said they were also seeking an Arab man who allegedly stabbed a white man in the back.

Prime Minister John Howard condemned the violence, but said he did not believe racism was widespread in Australia.

"Attacking people on the basis of their race, their appearance, their ethnicity, is totally unacceptable and should be repudiated by all Australians irrespective of their own background and their politics," Howard said.

But he added: "I'm not going to put a general tag [of] racism on the Australian community."

Australia has long prided itself on accepting wave after wave of immigrants — from Italians and Greeks after World War II to families fleeing political strife in the Middle East and Southeast Asia. In the last census in 2001, nearly a quarter of Australia's 20 million people said they were born overseas.

However, tensions between youngsters of Arabic descent and Australians of European origin have been rising in recent years, largely because of anti-Muslim sentiment fueled by the Sept. 11, 2001 terror attacks in the United States and deadly bombings on the Indonesian island of Bali that killed 88 Australians in October 2002.

About 300,000 Muslims and Arabs live in Australia, the majority in large cities.

"Arab Australians have had to cope with vilification, racism, abuse and fear of a racial backlash for a number of years, but these riots will take that fear to a new level," said Roland Jabbour, chairman of the Australian Arabic Council.

The riots apparently began after rumors circulated that youths of Lebanese descent were responsible for an attack last weekend on two lifeguards at Cronulla Beach. Police said the assault was not believed to be racially motivated.

Police had increased the number of officers patrolling the beach in the Sydney suburb on Sunday after cell phone text messages urged people to gather there to retaliate for the attack.

Police said more than 5,000 white youths, some wrapped in Australian flags and chanting racist slurs, fought with police, attacked people they believed to be of Arab descent and assaulted a pair of paramedics trying to help people escape the riot.

Police fought back with batons and pepper spray.

Many of the youths had been drinking heavily, police said.

One white teenager had the words "We grew here, you flew here" painted on his back. Someone had written "100 percent Aussie pride" in the sand. TV broadcasts showed a group of young women attacking another woman, whose ethnicity was not clear.

The violence shocked this city of 4 million, which prides itself on being a cultural melting pot.

"What we have seen yesterday is something I thought I would never see in Australia and perhaps we have not seen in Australia in any of our life times and that is a mass call to violence based on race," Community Relations Commission chairman Stepan Kerkyasharian told Sky News.

"Our disgrace," said a front page headline in Sydney's Daily Telegraph. Below was a picture of white youths attacking a man who appeared to be of Arab descent on a train in Cronulla.

Keysar Trad, a prominent member of Sydney's Lebanese community, said he had spoken to one victim who was released from the hospital Monday and was urging for calm.

"He doesn't want any retaliation by anybody from a Middle Eastern background," Trad said. "He wants everyone to allow the rule of law to take its course, leave it to the police and he said he holds no grudges against anyone."

Morris Iemma, the premier of New South Wales state, said police would use video images and photographs to track down the instigators.

"Let's be very clear, the police will be unrelenting in their fight against these thugs and hooligans," he said.

Cronulla, one of the few beaches in Sydney that is easily accessible by train, is often visited by youngsters from poorer suburbs, many of them of Arab descent. Residents accuse the youths of traveling in gangs and sometimes intimidating other beachgoers.

Cronulla is several miles south of iconic Sydney beaches like Bondi and is not a popular destination for foreign tourists.

Aborigines rioted in the Sydney neighborhood of Redfern in February 2004 after blaming police for the death of a 17-year-old boy. Forty police were wounded, eight of them hospitalized, in a nine-hour street battle with residents.