race issues

we practically had a race riot at work yesterday.
one of my collegues is ukrainian, from some village i have never heard of. naturally, i talk to her alot, since we both speak russian. she has been here for 7 years already, but her english is pretty poor, which i suppose is not surprising: she spoke none at all when she arrived, and spent most of her first few years here cleaning dishes, most likelywith other ukrainians and poles. anyway, my point isthat her brain stayed in ukraine, and she hasnt really blended in much with english society, or it would seem, english values.
i am used to such people, so i didnt really think anything of it that she called our afro-british collegues "ni***rs" when we were speaking together in russian. i could never use that word myself, but russians do all the time and it is not considered in the same way there as it is here. but when you are in england, you have to follow english rules whether you like it or not, and that was the problem yesterday.
a woman came into the shop wearing a full burqua. she bought her books and left. then one of my other collegues commented that the burqua had been really beautiful. it had been: it was obviously made of really expensive material, and the cloth looked great. but oli (the ukrainian, the english call her that since her full name is too hard for them to pronounce) said that "those people" should go back where they came from if they dont want to dress "normally."
it was at that moment that all hell broke loose. one of the other collegues standing up front near me happens to be a british-born muslim and literally went berserk. he told oli she was a racist bitch, and that he, and most british muslims, had more right to be there than she, since he was born there, and speaks correct english, and that maybe she was the one who should go back where she came from, seeing as she obviously failed to understand english values. an incredible fight ensued. apparently it never occurred to oli that most english people consider english born muslims to be as english as anyother english person, she seemed to think that because her skin is white she has something in common with the english. but, of course, english people judge her by her poor english and think that she is stupid.....and foreign. i have to admit there was something ridiculous about hearing someone in a thick ukrainian accent saying london born people should "go back where they came from." at a certain point i fled to another section just to avoid getting dragged into the whole scene. but later MD (the british born muslim, whose parents are sudanese) told me how much he hates oli since she is always making racist and nationalistic remarks. he kept asking me why i was so different, when oli and i both come from the same place (we dont, but he doesnt understand that, since he just hears us talking to each other in the same language and assumes we are from the same place, and anyway oli claims to be russian, since she doesnt speak ukrainian and doesnt want to), and then oli came by to complain to me in russian that MD was a stupid ni***r and should go back to africa. apparently she had failed to grasp MD's point that he has never BEEN to africa and has lived in london his whole life.
later the boss came by to ask ME to explain the situation, since i seem to have become the specialist in explaining east euro behaviour. these moments make me cringe. i dont think such discussions should take place at work, in front of customers, many of whom might well be offended by such things, and i certainly cant understand why you would seeming delibrarely go out of your way to offend someone's faith.....i like to be on good terms with all my collegues, so i am nervous how this will play out, and how i will avoid taking sides.