The rioting broke out after the Solomons Parliament elected Snyder Rini, 57, its new prime minister.
Mr Rini was finance minister when the Solomons spiralled into an ethnic conflict in the late 1990s. The unrest only came to an end in August 2003 after Australian- and New Zealand-led military intervention.
New Zealand has 35 officers with the Participating Police Force which was yesterday guarding Parliament when people opposed to Mr Rini began rioting.
A spokesman for the Royal Solomon Islands Police (RSIP) said 19 police had suffered a range of injuries, including two New Zealanders who are suffering from cuts and bruising from rocks and glass fragment wounds. The others injured were Australians. Five RSIP officers have also been hurt.
He said authorities were considering declaring a state of emergency and a curfew.
The spokesman said the rioters attacked the Honiara suburb of Chinatown, known for its shops and factories, and destroyed 90 per cent of it. The fate of the country's only daily newspaper, the Solomon Star, is not known. It and the popular Honiara Hotel are in Chinatown.
Publisher John Lamani said there would be no paper today.
"We don't know what to do. Unfortunately we will not be coming out tomorrow."
It's feared the Honiara Hotel, where last September Prime Minister Helen Clark hosted a cocktail party, has been attacked because of its owner Sir Thomas Chan, a naturalised Solomon Islands citizen of Chinese origin. He was said to have close links with Mr Rini.
Rioting groups also attacked the Casino Hotel and set fire to numerous vehicles on the streets, many of them Australian police cars.
The groups were still at large this morning.
The spokesman said tear gas was fired during the night and a helicopter chartered to the RSIP was flying overhead directing police.
The New Zealand High Commission, which is in an office building in the main part of town, was evacuated yesterday afternoon, while the residency of High Commissioner Brian Sanders is secured behind high fencing overlooking the town.
A Solomons Government official, Johnston Honimae, said rioters and looters moved through the city from Chinatown to Point Cruz.
Looters took off with whatever they could get their hands on, filling up shopping bags with no resistance from owners who are mostly Chinese, he said.
Shortly after he was elected, Mr Rini told reporters he was feeling comfortable.
"It's better than 2001 where we have to talk to militants. But now this country is peaceful and I have no fear at all," Mr Rini said.
"I respect protestors and asked them to come forward and have dialogue with the government," he said.
Several MPs claim that Mr Rini's camp lured MPs from other camps by lucrative financial promises.
"I denied promising MPs big amounts of money as purported.
"There's no influence by the Chinese in this whole show."
The prime minister escaped unhurt from Parliament when police, including a riot squad from Australia, evacuated him.
Miss Clark told National Radio this morning that there had been a lot of damage.
"The damage overall has been extensive and it's possible that the governor-general may declare an emergency today," Miss Clark said.
"Honiara city is off limits. There are police roadblocks set up, that's obviously to try and stop others joining the looters."
She said New Zealand's platoon of 46 troops in the Solomons were guarding the country's main prison, which held serious offenders such as murderers.
Last night Mr Sanders told Fairfax that when rioting and looting broke out in the main part of Honiara the High Commission was quickly closed and staff sent home.
The situation was serious.
"A new prime minister has just been elected and for people who don't like the result, to do what they are doing, is very unfortunate for the country. People are not listening to those who elected the politicians.
"There are a small number of individuals who have seen an opportunity to cause some trouble."
Mr Sanders did not believe it was the re-emergence of militant groups who plunged the country into civil war: "it is quite random."
The nation of 553,000 plunged into crisis when indigenous people of Guadalcanal - where Honiara is situated - began to object to the growing numbers of people from Malaita.
It spun out of control with the formation of variously named Guadalcanal rebel forces and most Malaitans were driven into the capital, or back to their home island across Ironbottom Sound. In the guerrilla war around 100 people were killed while 20,000 people lost their homes.
The rival illegal Malaita Eagle Force dominated Honiara and in June 2000 overthrew the government of Prime Minister Bartholomew Ulufa'alu and installed Manasseh Sogavare.
He tried to prevent democratic elections taking place but when they were finally held in 2001 Sir Allan Kemakeza of the Peoples Alliance Party came to power with Mr Rini of the Association of Independent Members as his deputy.
Mr Rini in 2001 approved up to SI$80 million in remissions, giving Asian logging firms tax breaks while allowing tax free entry on beer, cigarettes and vehicles for people linked to militants.
- Fairfax
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