Hundreds of anti-Islam protesters who gathered to decry the planned construction of a mosque in Bendigo failed to make Muslims feel unwelcome there, the town's mayor says.

A rally on Saturday organised by the far-right United Patriots Front attracted about 200 people, who carried Australian flags and signs urging the town to "say no to the Islamisation of Bendigo".

The UPF was involved in an ugly anti-Islam rally in Melbourne last month and told supporters that Bendigo's first mosque would lead to an influx of Muslims who would turn the town into a "caliphate".

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