Families have been left "traumatised" after a gang of masked youths used poles, a machete and a sledgehammer to unleash a harrowing attack on two males on an inner-city street in Melbourne.

CCTV footage shows a group of balaclava-clad young people hanging out of the sunroof of a car as it drove down Bay Street in Port Melbourne before the broad daylight attack around school pick-up time yesterday.

It's believed they were searching for their targets. The car then stopped and several people, including one person appearing to carry a large knife, jumped out and began running.

Police were then called to reports of an attack on Lalor Street, located just a few hundred metres away, about 3.15pm.

It is understood the group of six hooded thugs chased two young people down the street.

Witnesses said the group violently attacked the pair with a pole and a machete.

"It was a ruckus... there was screaming," resident Hilary told 9News.

"I left South Africa to not go through the violence and the crime I witnessed ... I moved to the UK, I witnessed the same thing and now it's right outside my front door in Australia."

A tradie tried to intervene by throwing bricks and a sledgehammer at the fray, smashing the sunroof of the stolen car.

But he said one of the thugs took the tool and used it as a weapon.

Families say they were cowering inside their homes in fear as the violent scenes took place on their doorstep.

"My daughter was traumatised," Hilary said.

"We need boots on the ground. We need heavier police presence."

3AW's Ross Stevenson said he has "never seen" an incident like this in Melbourne.

"It looks like a scene from Syria," he said of the footage.

The beaten, bloody victim tried to hide in George Tsingos' store.

"Young bloke came in saying 'please, please, they're chasing me, hide me," Tsingos said.

"I said 'get out of the shop, get out! I'm calling the police'.

"Lock them up, throw away the key. They're not punished hard enough, Do we look at the laws? Ms Allan?"

Witnesses said the group fled the area in a white Haval SUV, which was later spotted at Junction Oval in St Kilda.

Police believe the SUV was stolen from a gym in Clyde North on April 18.

The group, including the targets of the attack, left the scene before police arrived.

"No victims have come forward to report the incident to police," a spokesperson for Victoria Police said.

"There were no reports of weapons involved."

Police are urging the victims to come forward not only so they can further investigate the incident, but to ensure the victims receive appropriate medical treatment.

The car has not been found, police added.

No arrests have been made.

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