SYDNEY, Dec 12: Racial violence erupted for the second straight day in Sydney on Monday, with cars smashed and reports of shots fired just hours after Australian Prime Minister John Howard appealed for calm.

Witnesses said ‘chaos’ had broken out in a shopping centre at Sydney’s Cronulla beach, the scene of mob violence on Sunday, with vehicles damaged and police making arrests as gangs of men roamed the streets.

“People are standing around in shock, just watching,” said a reporter for local radio station 2GB. “Every window in some cars has been smashed. Roads have been blocked (by police).”

One resident told the Australian Associated Press that about 50 cars had swept into the area, disgorging men of Middle Eastern appearance who began trashing every car in sight with baseball bats.

Other eyewitnesses said gunshots had been heard near a hotel in Cronulla, but police could not confirm reports that a person had been shot.

The hotel is located opposite North Cronulla beach, the scene of violent attacks on Sunday by mobs of local whites targeting men of Middle Eastern appearance.

In the mainly Muslim suburb of Lakemba, about 500 young people blocked roads near the local mosque, believing an attack was imminent. They later dispersed, some hurling rocks at police.

More than 30 people were injured and 16 arrested in some of the worst racial violence in Australian history as riots spread from Cronulla afternoon to neighbouring suburbs overnight.

Mr Howard earlier condemned the violence and called for ethnic tolerance.

He dismissed any suggestion his government’s recent warnings about the possibility of attacks by home-grown Muslims had fuelled the rampage.

“It is impossible to know how individuals react but everything this government’s said about home-grown terrorism has been totally justified,” he said, an apparent reference to the arrests last month of 18 Muslim men on terrorism charges.

New South Wales state Police Minister Carl Scully said white supremacists and neo-Nazis were among those involved in the attacks.

More than 5,000 people gathered at Cronulla beach on Sunday after e-mail and mobile phone messages called on local residents to beat-up ‘Lebs and wogs’ — racial slurs for people of Lebanese and Middle Eastern origin.

The move followed assaults a week ago on two white 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.

One Muslim woman had her headscarf ripped off. Six police officials were injured as they tried to quell the violence.—AFP