We saw inappropriate and often cowardly behaviour, say police
Riot police in Melbourne have used pepper spray to separate hundreds of rival protesters after clashes broke out between anti-Islam and anti-racism rallies.
Hundreds of police formed a line between the two groups, but were unable to keep some protesters apart.
Video shows several people, their faces covered with bandanas, using flagpoles flying the Australian flag to attack rival protesters.
According to local media, both sides had been hurling abuse at each other during the marches with anti-racism protesters chanting: "Nazi scum, off our streets."
Police arrested seven people and have accused some of the protesters of "cowardly behaviour".
"I understand the need and the right to protest ... but what we can't have is this violence in our community," Victorian state Police Commander Sharon Cowden said.
"We saw inappropriate and often cowardly behaviour, people wearing masks."
The clashes happened on the same day as Australian Prime Minister Malcolm Turnbull and opposition leader Bill Shorten joined thousands of others to walk to the Melbourne Cricket Ground to show their support for Aboriginal reconciliation.
When asked about the rallies, Mr Turnbull acknowledged that eliminating racism was still a "work in progress".
"But I have to say we are the most successful multicultural society in the world," he added.
"There is more work to do. This is not something to be complacent about."
Indigenous Australian Olympic gold medalist and Senator Nova Peris, who recently announced her decision to retire from politics, says there remains an "ugly side" to the country that needs to be addressed.
She has used her official Twitter account to post a screenshot of a Facebook exchange she had with someone who called her a "black c***" and told her to go "back to the bush".
Ms Peris has described the abuse as "vile", but wanted others to see the comments to raise awareness of racism in Australia.
"I'll continue to wear ochre on my face just like my people have done for thousands of years! My skin is my pride," she said in her response to the comment.
Indigenous Australians are under-represented in the country's parliament.
When Ms Peris was elected to the Senate in 2013, she became the first Aboriginal woman ever to sit in the national parliament.