German authorities have raided the homes of 21 far-right leaders as part of a crackdown against anti-Semitic organisations.

About 400 police officers seized guns, propaganda material and small amounts of drugs during the operation across 10 German states, officials said.

The raids follow several race-related shootings which have prompted Germany to step up monitoring of far-right groups and sympathisers.

Last month a gunman shot dead nine people at shisha bars near Frankfurt and in October a gunman killed two people during an anti-Semitic attack in the city of Halle.

Germany is facing a rising threat from right-wing extremists. ( DPA via AP: Sebastian Willnow )

The raids also come in the wake of Interior Minister Horst Seehofer banning the United German Peoples and Tribes group, which espouses racist and anti-government views.

"Right-wing extremism, racism and anti-Semitism are being fought relentlessly even in times of crisis," Mr Seehofer said, adding the groups' ideology "poisons our free society".

Germany's domestic intelligence agency meanwhile has stepped up its surveillance of a radical wing of the far-right Alternative for Germany (AfD) Party, known as The Wing.

The agency's chief said right-wing extremism was the biggest threat to German democracy.

AfD leaders later decided to disband The Wing, declaring it would dissolve itself by the end of April.

ABC/wires