German Chancellor Angela Merkel has condemned violent anti-migrant protests in the state of Saxony, saying "hate in the streets" has no place in the country.

German police fired water cannons and used pepper spray in the city of Chemnitz on Monday night during a second day of protests, as 6,000 far-right demonstrators, some chanting neo-Nazi slogans and giving Hitler salutes, clashed with counter-protesters over the fatal stabbing of a 35-year-old German man in a brawl.

Two men – an Iraqi and a Syrian – have been arrested in connection with the stabbing.

Demonstrators on Sunday chased people who looked possibly foreign, videos from the protests show, while German media reported similar cases of intimidation.

“What we have seen is something which has no place in a constitutional democracy,” Merkel said Tuesday in Berlin, during a joint news conference alongside Croatian Prime Minister Andrej Plenkovic.

“We have video recordings of people hunting down others, of unruly assemblies, and hate in the streets, and that has nothing to do with our constitutional state,” she said.

Merkel also condemned the stabbing, saying it was “a horrible incident.”

The rallies are the latest examples of division in Germany triggered by the country’s intake of refugees and migrants.

Merkel has faced fierce criticism from her political opponents over her 2015 decision to keep the country’s doors open to asylum-seekers at the height of the Syrian war, allowing more than a million refugees to enter Germany that year alone. The decision has also given a boost to the far-right Alternative for Germany (AfD) party and emboldened neo-Nazi and anti-migrant groups.

Ten people are being investigated for giving Nazi salutes, an illegal gesture in the country, during Monday’s protest, Chemnitz police said.

There were around 1,500 counter-protesters on Monday night, vastly outnumbered by the 6,000 far-right demonstrators, many of whom had travelled from other states to Chemnitz, Saxony state police said.

Monday evening’s protests ended with a few scuffles and bottles thrown, police said, but German media claimed police were unprepared and had lost control of the huge crowd. Eighteen protesters and two police officers were injured, Saxony police said.

German Foreign Minister Heiko Maas said Tuesday that the anti-immigration protests were “intolerable.”

“The majority of people in Germany want an open, cosmopolitan, respectful Germany, where people encounter one another with respect, and it is catastrophic what people can do to one another,” Maas said.

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