Seven youths have been arrested after allegedly terrorising families at Hillarys Boat Harbour.

Police were confronted by around 40 school-aged youths who were shouting abuse and intimidating members of the public about 3.40pm on Monday.

The scene escalated when the group allegedly began throwing bottles and other items at officers and police vehicles before they dispersed.

The incident led to seven arrests and cautions were issued for various offences, including obstructing police, stealing and disorderly conduct.

Anyone who saw the incident, or has any footage of it, are urged to contact police.