The dynamics of shock waves and cavitation bubbles generated by short laser pulses in water and elastic-plastic media were investigated theoretically in order to get a better understanding of their role in short-pulsed laser surgery. Numerical simulations were performed using a spherical model of bubble dynamics which include the elastic-plastic behaviour of the medium surrounding the bubble, compressibility, viscosity, density and surface tension. Breakdown in water produces a monopolar acoustic signal characterized by a compressive wave. Breakdown in an elastic-plastic medium produces a bipolar acoustic signal, with a leading positive compression wave and a trailing negative tensile wave. The calculations revealed that consideration of the tissue elasticity is essential to describe the bipolar shape of the shock wave emitted during optical breakdown. The elastic-plastic response of the medium surrounding the bubble leads to a significant decrease of the maximum size of the cavitation bubble and pressure amplitude of the shock wave emitted during bubble collapse, and shortening of the oscillation period of the bubble. The results are discussed with respect to collateral damage in short-pulsed laser surgery.