Germany's recent upsurge in anti-Islam sentiment appears to have taken a dark new turn, as a 20-year old asylum seeker was murdered in Dresden this week.

Khaled Idris Bahray, a Muslim originally from Eritrea, was found stabbed to death close to his home in southern Dresden on Tuesday morning. The previous night, an estimated 25,000 demonstrators from the far-right Patriotic Europeans Against the Islamization of the West (PEGIDA) group, which proclaims to oppose Islamic extremism, had marched through the center of the German city. Many have now linked the murder of the 20-year-old to the ongoing increase in racist attacks there.

The Leubnitz-Neuostra district of southern Dresden is characterized by unwelcoming Communist-era tower blocks. On Monday evening, Bahray stepped out to buy some cigarettes from a local supermarket, and did not return. His roommates were not initially worried, assuming that he had gone to stay with other friends nearby. His body was found early on Tuesday morning by a neighbor, surrounded by blood and with visible wounds.

The police initially ruled out murder, but after an outcry from local media and the representatives of Germany's Eritrean community, they reconsidered, and an autopsy was ordered.

"Based on current findings, we conclude that the injury was caused by a stab from a knife. We conclude that it was no accident. It is murder," said Dresden Police President Dieter Kroll.

An investigation into the murder has begun, and a call for inquiry into the initial denial of murder by the police has been launched in the German parliament, raised by members of the Green Party.

Immediately following the incident, questions were raised regarding the increasing prevalence of anti-immigrant and anti-Islam sentiments in the city. Just days before the attack, neo-Nazi graffiti, including a swastika, was painted on the door of the flat in which Khaled was living, accompanied by the message "We'll get you all."

Many foreigners feel insecure on the streets of the city amid the upswing in attacks in Dresden. After a PEGIDA demonstration in December, a group of "foreign-looking youths" came under attack in a Dresden mall, with several injuries reported. An Eritrean speaker at a vigil held in memory of Khaled told the crowd: "We are afraid. Help us," before claiming that most asylum seekers in the city want to leave.

The rise in hostility towards refugees and migrants has been linked to the ongoing PEGIDA demonstrations, which began in October 2014 and have now risen to attendance levels estimated at 25,000 people. PEGIDA claims it is a citizen's movement against radical Islam and rejects claims of extremism, although many leading members are known to police as neo-Nazis and fascists, and their leader, Lutz Bachmann, is a convicted criminal, with offenses ranging from drug-smuggling to burglary and assault. There is also a large crossover in membership between PEGIDA and the football hooligan group Hooligans Against Islamism (HoGeSa), members of which rampaged through Cologne in late 2014. Counter-demonstrations have been held in cities across Germany, with an estimated 100,000 rallying across the country, and Angela Merkel herself attending a protest in Berlin organized by the city's Muslim community.

Dresden is known as one of the least-welcoming cities for foreigners in Germany. The city council includes two members of the NPD, Germany's far-right party, which has been widely accused of neo-Nazism, as well as five from Alternativ fur Deutschland (AfD), a right-wing anti-EU party. The city, which was flattened by Allied bombing in 1945, was for many years host to "commemoration" marches of Nazi sympathizers, which numbered 6,000 at their height, until they were halted by sustained anti-fascist blockades. Racist attacks are not unprecedented in the city — most notably with the case of Marwa El-Sherbini, whose murder in Dresden in July 2009 sparked international outrage.

The debate over asylum seekers has been at the forefront of German politics in recent years, particularly in the former East. National policy is to house refugees in detention centers, often on the outskirts of cities, and extensively curtail the rights of refugees to move freely. The situation is exacerbated by the location of the detention centers, which are often in areas known to be hotbeds of neo-Nazi activity, such as Berlin's Marzahn district, which has also seen clashes between fascists, anti-fascists, and police in recent weeks.