Five teenagers were arrested Thursday over a vicious anti-Semitic attack on a bus full of children from Jewish schools in Sydney that left them traumatized.

Police said a group of five- to 12-year-olds were travelling on a private bus to the suburb of Bondi Junction on Wednesday afternoon when eight teens jumped on.

They then proceeded to racially taunt the children and made physical threats, with parents claiming they yelled "Heil Hitler, kill the Jews" and "free Palestine".

Children also reported the attacks threatened "we will cut your throats" and "Palestine must kill you Jews".

None of the children were hurt but Jacqui Blackburn, whose three daughters were on the vehicle, told ABC radio they were traumatized and many were in tears.

"My little daughter said she's just really scared of everything now," she added, while questioning why the driver allowed the teenagers onto a school bus.

Five of the eight teens were arrested overnight before being released into the custody of their parents as investigations continue.

New South Wales Jewish Board of Deputies president Yair Miller told reporters that guardians would now travel on school buses.  

"This abuse is totally unacceptable, especially against the most vulnerable in our society being primary-aged children," he said.