* Australia reports 2 coronavirus cases on Friday
* One case, in Melbourne, linked to a Perth quarantine hotel
* Second case in Perth a close contact of the first case (Adds details about the lockdown, ANZAC day services called off in Perth)
By Swati Pandey
SYDNEY, April 23 (Reuters) - Western Australia's capital of Perth and the neighbouring Peel region will enter a snap three-day lockdown from midnight on Friday after two people tested positive for COVID-19, the first cases of community transmission in Australia in a week.
Australia has all but stamped out the virus thanks to mandatory hotel quarantine for returning residents and citizens and snap lockdowns to arrest the infection.
The first case related to a man in Melbourne who likely contracted the disease during his two-week quarantine stay in a Perth hotel. second was his close contact in Perth, Western Australia Premier Mark McGowan said in a televised news conference, where he announced the lockdown.
"I know this is hard to take and I wish we didn't need to do this. But we can't take any chances with the virus," McGowan said.
The lockdown will close down most public spaces including pubs, restaurants, places of worship, libraries, and cinemas. Several sporting events scheduled for Friday night will go ahead, however, with masks mandatory.
Footage broadcast on national television showed instances of panic buying at supermarkets in Perth, and authorities said they were aware of heavy road traffic as people try and escape the lockdown for the long weekend marking ANZAC Day.
Dawn services on Sunday in Perth on the national day of remembrance to honour the members of the Australian and New Zealand Army Corps (ANZAC) during the First World War, have been cancelled for the second year in a row.
HOTEL QUARANTINE
Having closed its borders more than a year ago, Australia lets mostly citizens and permanent residents return from abroad. Returned travelers, except from New Zealand, have to undergo two weeks of mandatory hotel quarantine at their own expense.
The hotel quarantine policy has helped Australia to keep its COVID-19 numbers relatively low compared with other developed countries, with just over 29,500 cases and 910 deaths.
But the system is not fool-proof either.
"The hotel quarantine system, despite all of its improvements, has to face increasingly complex variants of concern," Victoria state Health Minister Martin Foley said earlier in the day.
Western Australia and New South Wales states are separately investigating cases of travellers in quarantine contracting the virus from infected guests staying in nearby rooms. said he has requested the federal government to cut the number of international arrivals per week into Western Australia to 512 from 1,025.
Australia has already tightened its border controls by reducing the number of travellers from India and other virus hotspots.