Video footage of the scenes at the Le Cenacle restaurant in Paris are now the subject of a criminal investigation.
The footage shows two Muslim women in headscarves sitting at a table.
They appear to sense hostility from the restaurant owner, who enters the dining room from the kitchen.
First woman: "We do not wish to be served by racists, Sir."
Second woman: "Oh, don't worry, don't worry."
The owner responds.
"Racists are not thugs. Racists like me, they don't kill people."
One of the women calmly challenges him, and he replies.
First woman:"Because we have placed bombs, Sir?"
Owner: "Madam, the terrorists are Muslim, and all Muslims are terrorists. This sentence says it all. Analyse it. There."
The open conversation unfolds in front of other visitors inside the packed restaurant.
But no one interrupts as the owner and woman continue to debate.
First woman:"I don't need to analyse rubbish."
Owner: "They killed a priest recently, okay? We are in a secular country, and I had a right to an opinion."
First woman: "Just as much as we do."
Owner: "People like you, I don't want them here. Period. It's clear."
First woman: "Yes, it is clear."
Owner: "You impose yourself here. That's not clear. Get out."
Second woman: "But you have to indicate that, Sir."
Owner: "But it is indicated, as I just told you."
Second woman: "If it were indicated, we wouldn't have come, Sir."
Owner: "Well, now you know, so get out."
Second woman: "Yes, we're going, don't worry."
The video of the Paris restaurant incident has gone viral on social media, sparking widespread public debate.
French Women's Rights Minister Laurence Rossignol has called for sanctions against the restaurant owner.
And he has ordered a full inquiry by the Inter-Ministerial Delegation into Racism and anti-Semitism.
The restaurant owner now says he regrets what happened.
He says he got caught up in the fiery French debate surrounding the so-called burkini ban.
A Paris appeals court has overturned a controversial measure preventing women from wearing Islamic-compliant swimsuits, or any other dress that might be considered religious.
The court ruled the burkini ban seriously and illegally breached the fundamental freedom to come and go, freedom of beliefs and individual freedom.
But a number of French resorts, including in Nice, are still banning women wearing the Islamic dress in beach areas.
The spokesman for the Office of the United Nations High Commissioner for Human Rights, Rupert Colville, has urged them to abandon their ban.
"It's, frankly, a stupid reaction to what we're having, facing, in terms of terrorist attacks. It does nothing to increase security. It does nothing to improve public order. If anything, it stimulates friction and, therefore, undermines public order. If anything, it's having a counterproductive effect."
Mr Colville insists any public order concerns should be addressed by targeting those who incite hatred or react violently.
He says it should not involve targeting women who wear clothing they feel comfortable in.
