* States, territories impose border restrictions
* Fears Sydney's 28 case cluster will rise
* Beaches, parks, playgrounds closed
* Christmas travel chaos (Updates with more virus information)
By Colin Packham and Renju Jose
SYDNEY, Dec 18 (Reuters) - Christmas travel plans for thousands of Australians were thrown into chaos on Friday when states and territories imposed border restrictions after 28 COVID-19 cases were detected in Sydney, with fears infections could spread citywide.
Around a quarter of a million people in Sydney's northern beaches, where the cases have been found, have been told to stay home and wear masks if in other venues.
Restaurants in the area, which expected a lucrative Christmas trade, reported hundreds of cancellations, knocking prospects of an economic recovery from earlier virus waves.
"Everyone in greater Sydney needs to be on high alert," New South Wales (NSW) state Premier Gladys Berejiklian told a news conference on Friday in announcing 10 new cases.
NSW health authorities issued an "urgent call" to all state residents to monitor for COVID-19 symptoms, saying confirmed cases from Sydney's northern beaches had visited a number of locations around Sydney, Australia's most populous city.
Authorities have pinpointed two clubs at Avalon beach as the original transmission sites, but are still trying to hunt down patient zero, and have issued more than 30 potential secondary transmission sites, as far away as Bondi and Cronulla beaches in the east and south of the city.
Genome sequencing points to the latest virus strain being of U.S. origin, said NSW Health. A traveller arrived in Australia with a similar strain on Dec. 1, but it has not been confirmed that they are patient zero.
"My anxiety is we have not found the direct transmission route and we cannot be sure we have blocked the transmission line," said NSW Chief Health Officer Kerry Chant.
Hospitals in the affected suburbs and pop-up testing sites have been inundated with many people waiting hours to be tested.
Major public facilities in the northern beaches area, such as swimming pools and playgrounds, have been closed and visitors have been banned from age care facilities.
All beaches along the 29 km (18 miles) stretch of the coast have been closed until Monday.
Local media reported shoppers emptied shelves at a supermarket in the northern beaches on Friday, in a repeat of frenzied scenes earlier in the year when the coronavirus first hit Australia.
CHRISTMAS TRAVEL CHAOS
Many people flocked to Sydney airport on Friday to try and fly out of the state, fearing hard border closures. Some travellers who left NSW were placed in immediate hotel quarantine for 14 days when they landed in another state.
Queensland state and the Northern Territory demanded people who have been on the northern beaches to quarantine for 14 days. Western Australia state imposed this on anyone from NSW.
Australia's second most populous state said people from NSW will now require a permit to enter Victoria.
Until this week, Australia had gone more than two weeks without any local transmission, allowing most states and territories to remove nearly all social distancing curbs.
Such was the optimism that Australia on Thursday projected its economy will recover from its first recession in three decades faster than previously anticipated after containing the spread of COVID-19. hopes for an unchecked economic recovery, led by domestic tourism operators such as Virgin Australia and Qantas Airways QAN.AX , now seem unlikely.
"We have dealt with this before, we'll deal with it again, it's important that people remain calm about these issues," said Prime Minister Scott Morrison. "There is no magic formula that makes the pandemic just go away."
Australia has reported just over 28,000 coronavirus cases and 908 deaths since the pandemic began and estimates most active cases in the country are returned overseas travelers in hotel quarantine. (Graphic: https://tmsnrt.rs/34pvUyi)
NSW said on Friday that it had fined 13 crew from a LATAM Chile flight to Sydney $1,000 each for allegedly failing to follow orders and self-isolate.
As a result of the breach, the state will now require international flight crews to undertake mandatory quarantine in a handful of government-designated hotels.
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