Unionist leaders have condemned the burning of the Irish flag and a picture of Taoiseach Leo Varadkar placed on top of a bonfire in Co Tyrone.
As the PSNI launched a hate-related investigation into the burning of the flag and image in Moygashel near Dungannon, DUP leader described it as "disrespectful and wrong".
The burning of the flag and image was described as "childish" and "not acceptable" by Ulster Unionist leader Doug Beattie.
High profile loyalist activist Jamie Bryson addressed the crowd prior to the lighting of what was titled "No Irish Sea Border Bonfire'. Mr Bryson described the event as a "cultural bonfire" evening.
The placing of the picture of Irish premier Leo Varadkar and the flag is being investigated by police as a hate-related incident.
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PSNI Chief Inspector John Keers said: "We received a report on Saturday evening in relation to material placed on a bonfire in the Main Road area of Moygashel.
"Police are treating this as a hate-related incident. Evidence is being gathered in respect of this in order to establish whether criminal offences have been committed."
Mr Donaldson said on social media: "I am proud of my tradition but if we want respect for our culture & identity, then we must show respect to others.
"Burning the flag of our neighbouring state & a poster of the head of government of that state is disrespectful and wrong. It is not culture."
The bonfire attracted attention after a boat was placed on top of the pyre. On its side there was a banner stating: "Good Friday Agreement? That ship has sailed".
Another banner read: "Moygashel Says No to Irish Sea Border". The lighting of the bonfire at approximately 11pm followed a parade and an address by Mr Bryson.
Ulster Unionist leader Doug Beattie tweeted in response: "This is not acceptable, it is childish and promotes hate. Again the many are let down by a few."
The lighting took place days before the 11th night ahead of the July 12 marches organised by the Orange Order.
Merchandise, including t-shirts with the words 'Ulster Covenant', 'God save the King' and 'Celebrating 100 years of NI’, were sold at the event by the organisers, the Moygashel Bonfire Association. They were priced at £20.
In a statement, the association said: "Our culture is under attack on a daily basis, and if not resisted with everything in our power, our Britishness will become unrecognisable.
“Our cultural celebrations that we have grown to enjoy with our families will be demonised to the point of extinction.
“The bonfire boat and our efforts are to highlight our strong opposition to the Irish Sea border.
“We believe that the implementation of the Union-dismantling protocol aligns our economy with the South and is a process of transition towards a united Ireland.
“Loyalist anger is at breaking point and we hope to see a peaceful [resolution] to the situation before it is too late. We fear time is running out.”
Hundreds of bonfires will be set alight across the north on Tuesday night. Many continue to be the source of controversy, with some political representatives calling for more control over the sites. Organisers have been urged to use pre-made beacons.
It is also the busiest date for the Northern Ireland Fire and Rescue Service, which deals with hundreds of calls linked to the bonfires.