QUEDLINBURG, Germany (Reuters) - The Christmas market in this medieval German town could be off a page in a children's picture book.

The sugary smell of"Gluehwein" (mulled wine) wafts over wooden stalls selling toys and gingerbread while children sway to seasonal songs. Christmas lights illuminate the half-timbered houses around the square.

Last Saturday evening, three burly policemen stood under those fairy lights clutching truncheons.

Their job: to stop neo-Nazi violence.

Sure enough, a couple of hours later bottles started flying, a scuffle ensued and an ambulance drew up. The chatty waitress in a restaurant under Quedlinburg's town hall suddenly became flustered and locked the door, keeping her customers inside.

"Sorry, this has been happening a bit lately," she said, mentioning a neo-Nazi attack last weekend on some teenagers.

In statistics which make alarming reading given Germany's Nazi history, right wing-motivated violence is on the rise in the country as a whole and especially in the former east German state of Saxony-Anhalt.