Two Australian men have been arrested on the Thai resort island of Phuket over the shooting of two German tourists.

The German men were allegedly accidentally shot and injured when one of the Australians was aiming a gun at a Danish man who had failed to pay for the rental of a motorbike.

John Edward Cohen, 33, from New South Wales, and Adam Lewis Shea, 26, from Tasmania have been arrested in connection with the shooting.

Cohen, a long-time resident of the island, allegedly fired the pistol and hit the tourists at Patong Beach on Tuesday.

Local press reports said Thai police alleged Cohen then handed the gun to Shea, before each man fled in a different direction.

A local newspaper reported that German tourist Johann Baschenegger, 41, was admitted to hospital in a serious condition after being shot.

Joseph Woerner, 71, was reportedly in a satisfactory condition.

CCTV stills posted on the phuketwan.com website showed one of the German men nursing a bloody wound to his arm.

The altercation with the Danish man arose because he had failed to pay for the rental of a motorbike on the Patong bar strip.

Police said the shooting occurred around 7.45pm (local time) near the Baan Pirin Hotel where the Germans were staying.

The Australians were reportedly arrested nearby and taken to the Kathu police station.

Local reports say police are investigating whether the two Australians have links with an outlaw motorcycle club.

Lawyers are trying to have the men released on bail.

Australian officials say the men are receiving consular assistance.

In June last year Australian travel agent Michelle Smith was stabbed to death in Phuket when two local men attempted to snatch her handbag.

ABC/AAP