The joint rally of blacks and Indians had been called to promote peace after five days of interracial unrest.

Instead, it collapsed in violence today, illustrating anew the tensions and anger that deeply divide this country's nonwhite majority.

The incident capped a week of rioting and looting that has posed new dilemmas not only for South Africa's white-minority government but for its opponents as well.

The explosion of interracial violence here shattered the government's belief that the sweeping emergency powers decreed three weeks ago would put an end to the political unrest that has claimed nearly 550 lives in 11 months.

At the same time, however, the two main legal opposition movements -- the United Democratic Front (UDF) and its major black rival, Zulu Chief Gatsha Bu-thelezi's Inkatha organization -- also were tainted by the violence, their pleas for peace undermined because many of their supporters participated in the rioting.

Government officials could point to the nearly 60 deaths that resulted and to assaults on In dians living in this predominantly black township as proof that the country's nonwhites are too divided and self-destructive to be granted political rights or majority rule. The large-scale destruction of Indian houses and shops also has given fresh encouragement to the country's 800,000 Asians to support the government, which has the firepower to protect them.

The security forces' slow and confused response to the rioting suggested to critics that the government had decided to let blacks and Indians kill each other as an object lesson to both. But it also caused speculation that the Army and police may be spread too thin to cope with outbreaks in several regions simultaneously.

All of these themes were evident today in a series of incidents that began with the abortive peace rally called by Inkatha and ended with new outbreaks of rioting.

The meeting took place this morning in a field just below the charred remains of the historic Gandhi Settlement, which was looted and burned last week, its destruction symbolizing the emotional rift between blacks and Indians.

Inkatha had invited the Asian community to attend, but only about a hundred Asians did so. Others said they were afraid to go. Instead, most in the crowd of 5,000 were Zulus wielding traditional clubs, spears and machetes.

Inkatha Secretary General Oscar Dhlomo pleaded with the crowd for "partnership and solidarity" and denounced the United Democratic Front for clandestinely promoting "hooliganism, vandalism and violence."

But the meeting fell apart after word filtered down to the crowd that an Indian defending his house in this predominantly black township had shot a black youth. Hundreds of Zulus ran off to search for the Indian assailant, who apparently escaped.

The angry crowd then burned at least four Indian-owned houses. White police and soldiers in armored vehicles observed the burning from a distance but did not intervene. Some Indians who had watched the rally from the nearby main road also were harassed. Blacks struck their cars with clubs.

Police later reported that a roving band of Indians entered the neighboring black township of KwaMashu and set 10 houses and a bus afire. Columns of black smoke rose behind the hillsides near the rally site.

"You see what these people are doing to each other?" a police lieutenant asked a western reporter. "And you want us to make deals with them?"

Later the Indians gathered for their own meeting at a shopping center in their township of Phoenix, which armed vigilantes have guarded from black incursions for five days. They heard from Amichand Rajbansi, an Indian politician who supported the government's plan to create a separate parliamentary house for Indians and who is now a minister without portfolio in President Pieter W. Botha's Cabinet.

Rajbansi brought gifts and the implicit message that those who supported the government would be rewarded. He told the angry crowd that 60 houses would be made available each week for those who had fled their homes in Inanda. As for down payments, he said: "We'll take care of that."

He also promised police escorts for those who wanted to enter Inanda to see what damage had been done to their homes. After a heckler asked why police had not stopped black looters earlier last week, Rajbansi denounced him as a "bloody UDF plant." The crowd pummeled the man before he escaped on a passing truck.

Since its founding two years ago, the United Democratic Front has sought to build interracial alliances to oppose South Africa's apartheid system of racial segregation. But the front's inability to protect Indians in Inanda from black rioters, coupled with the perception among many Indians that the front tacitly supports the unrest, clearly has cost it support.

Front leaders here were put in the incongruous position of asking a government they despise to protect them. At the same time, they sought publicly to deny an obvious but painful truth -- that the burning and looting of Indian property by blacks were motivated by racial animosity as well as by poverty.

Zulu Chief Buthelezi has sought to capitalize on the unrest by blaming the front and by playing the role of peacemaker. But like the UDF's, his efforts were discredited by the violence. An attack by 300 Inkatha supporters on a UDF memorial service Wednesday caused more than a dozen deaths and added fuel to the blaze.

The Zulu vigilante squads that took to the streets later in the week seemed as intent on punishing alleged UDF supporters as on restoring order. Inkatha members in the crowd at the peace rally today turned on Indians even as speakers were pleading for harmony.

In the end, the only winners in five days of destruction may have been this township's poorest residents, who today were still gathering building materials and other salvage from the shells of their Indian neighbors' burned houses. Their poverty and powerlessness lay behind this round of unrest, as they have underlaid each episode of violence in this country since last September.

An Indian who would not give his full name spoke of those people today, acknowledging that only the government could satisfy their demands but warning that he and his fellow Asians would not allow them to destroy their way of life.

He was too young to remember the riots of 1949, he said, but he recalled being told that the Indians had been caught by surprise then and that more than 50 had been killed by rampaging blacks.

"But this is not '49, it's '85," he said. "If they attack us, we will attack back. The show will go on."