A homeless woman who had a firework thrown at the tent she and a friend were in said she "could have been killed".
A video of the attack, which Gwent Police is investigating, has been widely shared on social media.
Sarah McGloin, 36, and Ricky Shaw, 30, were sleeping in Caerphilly when the firework was thrown on Tuesday.
The force said no injures were reported but the "consequences of the act could have been horrific".
Local councillor James Pritchard said he considered the attack a "hate crime".
Ms McGloin said: "They could've killed me.
"They were just shouting abuse and throwing stuff at us at first, I got out and shouted at them and they went off, then came back.
"I was in the tent, I tried to get out and I just couldn't get out, so I had to just stay in there... there was nothing I could do.
"We've always got to be on our toes, that's why there's two of us, we've always got to watch something doesn't happen."
Speaking to BBC Radio Wales' Breakfast programme, Mr Pritchard said: "I'd go as far as to say it's a hate crime. They've deliberately targeted the most vulnerable people in society and I hope that they're brought to justice."
"It was only because it had been raining the days beforehand that the tent probably didn't catch fire. The rain may have saved their lives," he added.
Insp Gavin Clifton, of Gwent Police, called the act "reckless" and said it would be dealt with "robustly".
"The consequences of this act could have been horrific," he said.