The Muslim community of Ballarat in central Victoria is reeling after a 37-year-old man forced his way into an Iftar dinner at a community hall in the suburb of Alfredton on Sunday.
Iftar is observed by Muslims at sunset in Ramadan, a holy month of fasting in Islam.
After allegedly threatening children outside the venue, the shirtless and shoeless man reportedly shouted Islamophobic abuse at those inside the hall, including slogans against Allah.
Officers discovered the Alfredton man being detained by members of the public.
In an updated statement on Wednesday afternoon, Victoria Police contradicted an earlier one that made no mention off an arrest but said he was interviewed and told to move on.
After considerable backlash, the force suggested he was arrested before being released without charge.
The primary focus of officers was to ensure the safety of attendees at the event, police said.
"Officers collected details of witnesses as part of the investigation to identify and further offences committed by the man," the force added.
"Statements will be collected from all witnesses as part of the investigation. Investigators are considering charges relating to grossly offensive conduct and assault-related offences."
A petition addressed to local federal MP Catherine King, Ballarat mayor Tracey Hargreaves and the regional city's police demanded a thorough investigation and appropriate legal action, including charging the gatecrasher.
It had attracted more than 1200 signatories as of Wednesday afternoon.
"Behaviour involving threats, intimidation, and racist abuse - particularly in the presence of children - must not be tolerated," the online petition read.
It comes after Victoria Police copped flak for their handling of an alleged assault of a woman walking along the Goldfields Track from Bendigo to Ballarat in late December, declaring no offence was detected after a "thorough investigation".
Home Affairs Minister Tony Burke acknowledged the incident on Wednesday, saying he would discuss it at a meeting with Australian Federal Police Commissioner Krissy Barrett.
"People that go in to shout abuse at people, and intimidate people and use dehumanising language against people for observing their faith - don't pretend you're patriotic," he told reporters in Canberra.
"That's the opposite of who we are as Australians."
Premier Jacinta Allan said she had reached out to the Ballarat Muslim community over the incident.
"The rise of right-wing, anti-Muslim rhetoric online and in parliament has serious consequences - ordinary Australians are getting hurt," she said.
One Nation leader Pauline Hanson was censured by the Senate earlier in March for saying in an interview there were "no good Muslims".
Victorian laws establishing new serious vilification offences came into effect in September.
Threatening another person or group with physical harm or property damage because of a "protected attribute" can carry a prison term of up to five years.
City of Ballarat council said it was deeply saddened by the attack, while Ms King said every Australian Muslim had the right to feel safe.
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