•  Parliamentary seats allocation agreed

•  Fresh violence in Ambon kills eight

•  Indonesian youth demand referendum
•  Call to extend free vote to Aceh, Papua
•  Thousands protest in Aceh

•  Recovery at threat from pulp-fiction tale
•  Group slams IMF, World Bank over scam
•  Britain defends right to visit arms fair

•  Hot spots multiply in Indonesian forests

• Inflation down in August, exports up

No smiles in Dili as residents await backlash

Dili -- There were no smiles of celebration on the faces of the East Timorese in the capital Dili today when the results of the historic independence ballot were announced.

Fear, uncertainty and tension gripped those few who ventured out. Every car or truck that roared down the now deserted streets caused people to turn sharply to see if it was the start of the attack everybody is expecting.

Shots were fired randomly throughout the capital as the militia moved quickly on motorcycles, many armed with handguns.

The wife of pro-independence leader Leandro Isaac greeted me in tears at their home. She whispered the result of the ballot as though it was still a death sentence to speak it openly.

Out the back, Leandro was preparing to go to the safety of the Makhota Hotel, which is protected by over 100 Indonesian police who have barricaded the roads covering the surrounding block.

"We are not safe here, we must go, this house will be the first target," he said. Joao Alves, another senior official of the East Timorese independence party CNRT, who planned to stay at the house until the militia arrived, said, "Of course it is a victory for us but we have to get through the day alive. "All of us here, they will kill us too if they find us, but we are used to this." They had contingency plans to get out to the mountains around Dili to join the Falintil forces waiting there but today they felt some pro-independence people should stay.

Thousands of Timorese were fleeing the city today. All along the main western road leading out of town people were loading up cars, trucks and battered blue taxis with possessions, not even looking up when the occasional pop of an automatic weapon came out of the surrounding suburbs.

No-one was sure if the road blocks on the road leading west that were operated by violent militia yesterday were still there.

Horrible stories were circulating about killings and road blocks outside of town but with no traffic coming into Dili no-one knew if the stories were true. "We have 230 children in our school out here. All the men are sheltering with the priest.

There must be several hundred there and I know most church properties have people hiding there throughout Dili," said a nun who was looking after them in the suburb of Comoro, which was rapidly emptying of people.

"When they announced the vote on the radio there were three trucks of Besih Merah Putih [red and white iron] militia outside our gate so we told the children just to put their hands together quietly instead of cheering, they were all so happy," she said.

At the house of Bishop Belo more than 100 children were sheltering. One of them said through the fence, "Of course we are happy but the Bishop has told us to keep our happiness inside our hearts today because it is very dangerous," a young girl said before being moved away by church staff.

As yet the militia had not attacked, but the fear was that they would start as soon as the Indonesians had left.

At the airport was an Indonesian military transport C130 loaded up with soldiers, families and possessions. Hundreds of people milled about waiting for the commercial flight and the specially chartered Japanese evacuation flight that would take more journalists and their East Timorese staff.

Nervous and aggressive police had sealed off the dock area as Indonesians arrived in military trucks to board two cargo ships bound for Atapupu just across the border in West Timor. Helio Tavarres, an East Timorese who has lived in Australia since 1980, explained the reasons for the police fears whilst waiting for a flight out.

"They don't get told anything and they know that there are Indonesian intelligence and Kopassus troops [special forces] among the militia and they know they plan to attack today." "Basically the Kopassus outgun them and they are scared of being killed," he said.

Pointing to the Indonesian military troops as they fanned out across the tarmac he said, "We don't even know what their plans are. Is it security or will they try and prevent East Timorese leaving?" he said.

In an ironic twist, Helio, an ardent independence supporter ended up translating for militia leader Eurico Guterres as he waited to board the flight to Jakarta.

His men, the Aitarak militia, were still circling Dili, shooting their new pistols randomly after destroying homes this morning in the deserted eastern suburb of Becora, a fervently pro-independence area from which the population fled yesterday to the surrounding hills after militia moved in. Nobody knew what would happen today but the entire town expected violence.

Downer's home truths

Paul Daley -- The resounding pro-independence result of East Timor's autonomy ballot yesterday allowed Alexander Downer to say what has been on the minds of foreign ministers since Indonesia invaded, then annexed, the territory 24 years ago.

"I think if the Indonesians, in the late 1970s and through the 1980s, had shown a much greater respect for human rights in East Timor and had pursued an active hearts and minds campaign there ... they could have won the East Timorese over to the cause of integration."

That Indonesia chose a horrific, far more brutal path of repression -- which may have cost the lives of up to 200,000 East Timorese -- will remain that country's shame. Indonesia's decision in the face of enormous international pressure to allow the vote will not change that.

Mr Downer yesterday pledged that "Australia will stand by the people of East Timor". Given what he revealed about Australia's military plans for the province, he apparently has every intention of sticking to that pledge.

But, of course, the East Timorese heard very similar words from Australia's diggers in World War II, just before Australia abandoned the place. Again, after the Indonesian invasion in 1975, Australia turned its back on East Timor for the sake of its relationship with Indonesia.

As Mr Downer noted the historical significance of yesterday's result, he knew only too well what the cost of an independent East Timor would be to Australia.

For a start, in the next month it appears likely that Australia will have to contribute heavily to two military forces for East Timor -- the first a transition security mission, and the second a United Nations peacekeeping mission. There is every chance, given the ruthlessness of the militias, that Australians could be killed or injured in the process.

Peacekeeping costs serious money, and the increase in defence spending that the Prime Minister referred to last week, will soon have to become a reality.

After that, of course, Australia will have to dig even deeper to ensure that East Timor has enough development aid to ensure its long-term place as a successful nation in the region.

"We won't let East Timor down," Mr Downer said yesterday. "We will do all we can to help them move towards independence and to help East Timor once independence takes place, to become a viable and successful neighbor of Australia's."

Now, Australia has a golden opportunity to right some of the historical wrongs it has dealt East Timor.

Dili streets empty

Lindsay Murdoch, Dili -- It was the birth of a nation, the victorious end to a 24-year struggle for independence. But in Dili today no champagne was flowing, few people were rejoicing.

The words of their leader, Mr Jose "Xanana" Gusmao, before he was taken back to jail in Jakarta, spread quickly. "Today could have been a happy day, a day of celebrations," he said. "But today violence is the rule imposed on the defenceless population forced to witness their homes being burnt to the ground, the looting of their possessions, left to mourn their dead and care for the wounded."

Nothing adds up here. Why did General Wiranto, Indonesia's armed forces chief, suddenly cancel his scheduled visit to East Timor today? Surely his presence would have an enormous restraining influence?

Why is virtually everybody in the know leaving Dili? After being evacuated by helicopter to West Timor today a member of Indonesia's East Timor Taskforce said: "It's not safe there any more." Why is the Indonesian military, which has prided itself on protecting the population, suddenly making public contingency plans to evacuate the equivalent of two grand final football crowds from the territory?

Last night I shared a beer with a senior Indonesian policeman, who was checking his men had secured Dili's main hotels. "I hope daylight does not turn to darkness tomorrow," he said. "But I am worried because if it rains I won't have enough umbrellas." He warned foreign journalists not to leave their hotels for the foreseeable future.

Within an hour of the UN announcing that 78.5 percent of eligible East Timorese had voted to separate, foreign journalists, observers and diplomats were diving for cover outside one of the town's biggest hotels as a pro-Indonesia militiaman opened fire from the back of a motor bike.

Indonesian troops, put on the streets to stop more militia rampages, also ran for cover. Nobody here doubted it was the start of a descent into anarchy.

Before dawn broke over Dili harbor, truckloads of militia had driven to Dili's outskirts, waiting to hear the results of Monday's ballot. Their months-long campaign of terror had failed and they were about to find out. There will be anger.

Mr Eurico Guterres, the leader of the Dili-based militia called Aitarak, or Thorn, surprised everybody by breaking his own ban on East Timorese leaders leaving the territory and caught a plane to Jakarta.

"We have been defeated diplomatically but we are not giving up," he said. The man who, human rights groups say, should be facing charges of mass murder was asked how he felt after hearing the result. "I feel normal," he said. "Peace is peace. We have to accept the result but I demand to maintain my rights as an Indonesian citizen. I can't betray my homeland."

A few days ago Mr Guterres, a one-time Dili gang leader who has strong Indonesian military connections, was threatening East Timor with a "sea of fire" if people voted for independence. A few of us wondered whether he was leaving so that any blame for what is about to happen could not be levelled at him.

Militias step-up campaign of terror

Lindsay Murdoch, Dili -- East Timorese have voted overwhelmingly to end Indonesia's rule of their territory and become one of the world's newest, and smallest, independent countries. But violent pro-Indonesia militias gave the pro-independence majority little chance to celebrate.

Within hours of the United Nations announcement of results of last Monday's independence vote, the militias were back on the streets of Dili, opening fire near the local UN compound and on a hotel housing foreigners, including journalists. By mid- afternoon, smoke was rising from several burning houses in a pro-independence neighborhood.

UN sources said staff had to be evacuated from the towns of Los Palos and Same, where anti-independence mobs roamed through the streets, firing guns. An American citizen, a civilian police adviser, was shot in the stomach in Liquica, 30 kilometres west of Dili.

While the result of the ballot was greeted with applause around the world, there was deep concern the former Portuguese colony could be plunged into full-scale civil war.

Thousands of people have fled the capital for the surrounding hills, fearing a major outbreak of violence, and thousands swamped police stations in Dili seeking a way out.

In a humiliating defeat for Indonesia, 78.5 per cent of the 438,968 eligible voters rejected an offer of broad autonomy despite months of terror and intimidation by pro-integration militia. Almost 99 per cent of those registered voted.

In Canberra, the Foreign Minister, Mr Alexander Downer, revealed that Australia is lobbying the UN and Indonesia to accept a swift deployment of international troops to stop the spiral of violence. If necessary, armed Australian troops could be in East Timor within days as part of an international security force. "Australia will stand by the people of East Timor at this time," he said. "We won't let East Timor down, we will do all we can to help them move towards independence."

Although the voters rejected Jakarta's autonomy, independence is still some way off. The transfer of power will only formally be complete when Indonesia's top law-making body meets in October and repeals the 1976 law that turned the former colony into Indonesia's 27th province.

Many Indonesian politicians, including the country's possible next president, Ms Megawati Sukarnoputri, are unhappy with the prospect of independence, even though leaders of the main parties have undertaken to respect the decision.

Most unhappy is the military, worried that independence in East Timor will encourage rebel movements elsewhere in the troubled archipelago of 17,000 islands.

In Jakarta, President B.J. Habibie, who in January reversed his predecessor's policy and offered East Timor independence, promised to honor his commitment and called for calm. But observers in East Timor said the well-armed militias were likely to seek revenge and continue their bid to try to partition the province unless a strong counter-force prevailed.

American ambassador Stapleton Roy, who late today met President Habibie to discuss the deteriorating situation, said: "We were discussing the situation in East Timor and looking for ways that we can ... ensure we have a satisfactory situation there."

Earlier, pro-independence leader Jose "Xanana" Gusmao warned of "total destruction" in a statement that hailed the result of the vote as a vindication of years of struggle. The jailed guerrilla chief, the man expected to become the new state's first leader, said he feared a new wave of bloodshed and chaos.

"We foresee a new genocide ... We foresee total destruction in a desperate and last attempt by the Indonesian generals and politicians maybe as well to deny the people of East Timor their freedom. I call on the international community to save the [East Timorese] people with the immediate dispatch of an international force."

The result of the vote will increase pressure on countries like Australia, New Zealand and the United States to send in armed peacekeepers. Thousands of Australian troops are already on a heightened state of readiness in Darwin.

Organising soldiers under a UN flag would take at least three months, and under UN-brokered agreements, Indonesia is in charge of security until its parliament rescinds the annexation of East Timor.

However, Australia has spoken about a "coalition of the willing" -- countries who would form a force quickly and then ask the UN Security Council for approval.

Military begins to punish Timorese

At least 20 people have been killed and the western East Timorese town of Maliana set ablaze and all but destroyed.

An Australian observer who left the town early this afternoon in an armed convoy of Indonesian police said over 200 houses were burning in the town and over 100 people had taken refuge in the Indonesian police compound.

The observer said, "the only people in the streets when we left were the militia and the military and the destruction of the town was continuing."

The United Nations abandoned the town earlier today amid fears that if they did not leave Maliana now, they may not have left at all.

Victims of the bloodshed include two local UN staff. It is understood all of Indonesia's 200 special mobile police based in Maliana have retreated with the UN.

Spokesman David Wimhurst said the 430,000 ballot papers were mixed together to prevent Identification of which areas favour independence and which want to remain with Indonesia.

The UN says the security situation in the territory is deteriorating rapidly. It is understood militia have also taken over and Indonesian television tower preventing UN TV broadcasts to some areas of East Timor.

And in the other western town of Liquisa, 20 to 30 houses have been burnt to the ground and militia have been active in the west and east of Dili.

While in Gleno, also west of Dili, civil order had completely broken down according to a UN official, with militia on every street corner and houses were being destroyed.

Indonesian police are still present but are confined to their compound, protecting themselves from the militia.

South of Dili, it is reported at least 15 are dead in the town of Holo Ruo and 25 houses burnt down after militia attacked overnight.

While the situation in Dili remains extremely tense with a massive fire engulfing the central municipal market as the sun went down.

Pro-independence East Timorese students were reportedly also under attack from militia in the area of the Santa Cruz cemetery.

And a group of some 75 journalists left the territory today as a media group issued an alert for those left behind.

Their flight left as the Safety Office for Media in East Timor (SOMET) issued a "high alert" for journalists still working in the violence-torn territory, cautioning them to cancel all unnecesary travel.

Troops

Three Hercules military transport planes landed in the East Timorese capital of Dili today, carrying hundreds of soldiers as security continued to worsen in the territory.

Their exact number or unit was unknown as journalists were not allowed to approach the tarmac, but they filled 14 waiting trucks, an AFP photographer said. Indonesian Foreign Minister Ali Alatas yesterday said that troops had been ordered to assist the Indonesian police ensure security in East Timor, amid international outrage over unchecked violence by pro-Jakarta militias.

While the Australian Government says Australia could deploy peacekeepers to East Timor very quickly if the need arises. Indonesia is still opposed to a peacekeeping force.

The Defence Minister, John Moore, has announced an extra 24 troops will fly to East Timor as part of the United Nations increased presence there announced after Monday's referendum.

But the Government maintains there can be no peacekeeping force unless Indonesia agrees to one.

Concerns

The Australian Prime Minister has telephoned Indonesian President BJ Habibie to reinforce Australia's concerns about the violence in East Timor. Mr Howard rang the President late this afternoon.

The Prime Minister's office says Mr Howard expressed his concerns about the latest violence and killings in East Timor and their implications for the safety of Australians in the province.

He stressed the need for Indonesia to maintain law and order. It is understood President Habibie told Mr Howard Indonesia would fulfil its responsibilities on law enforcement.

But it is not certain whether Mr Howard called for Indonesia to allow a peacekeeping force into the province or whether the President gave any sign he would agree to one.

Militias pack Dili as independence chosen

Dili -- Hundreds of pro-Indonesian militiamen roamed through the East Timorese capital Dili early Saturday as fear gripped the territory with the United Nations announcing an overwhelming vote in favour of independence.

There were no visible celebrations, despite 78.5 percent of East Timorese rejecting autonomy. Whole areas of Dili were deserted as fearful residents had fled to the the hills around the city for safety ahead of the ballot announcement by United Nations Secretary General Kofi Annan.

Annan told the UN Security Council in New York that 78.5 percent of eligible East Timorese, or 344,580 people, had turned down Indonesia's offer of autonomy.

Just 94,388, or 21 percent, wanted to stay a part of Indonesia, which invaded the former Portuguese territory in 1975.

In Jakarta, jailed East Timorese separatist leader Xanana Gusmao urged the UN Security Council to urgently send an international peacekeeping force to prevent a "genocide" following the result.

"I appeal to [the] secretary general of the UN to convene en emergency meeting of the UN Security Council to decide on the sending of multinational forces to save the Maubere (East Timorese) people from a new genocide," Gusmao said in a statement issued from his house jail.

In Dili, a heavily armed brigade of police guarded the entrance to the Mahkota Hotel where UN Mission in East Timor chief Ian Martin announced the result simultaneously with Annan.

Truckloads of Besi Merah Putih (Red and White) militiamen were seen entering Dili to join the predominant Aitarak militia, which has waged a campaign of terror over past months.

Sporadic shooting was heard in the city through Friday night, and motorists said there was no fuel available. Anxiety was high over the likely reaction to the ballot result by the militias, whom many observers charge are backed by the Indonesian military.

It was also unclear whether other pro-Indonesians would accept the result. Basilio Araujo on Friday said his umbrella United Front for East Timor Autonomy had suspended recognition of the vote because of alleged irregularites.

Jakarta on Friday night sent in 1,400 crack troops, apparently to help secure the capital, as international calls grew for a neutral peacekeeping force for East Timor.

Jakarta faces UN's wrath

Mark Riley, New York -- The Indonesian ambassador to the United Nations was ordered to appear before a special session of the Security Council yesterday to face international anger over his country's handling of the East Timor bloodshed.

The move came as the Portuguese delegation began a rearguard action to have an emergency UN peacekeeping force placed on standby to go into the territory if the situation deteriorates.

At the same time, the UN Secretary-General, Mr Kofi Annan, has summoned the foreign ministers of Indonesia and Portugal back to New York for a fresh series of meetings in an attempt to smooth the dangerous path to East Timor's expected independence.

The meetings are scheduled to take place within a fortnight, before the East Timor issue is discussed at the next session of the UN's General Assembly.

Indonesia's head of mission in New York, Mr Makarim Wibisono, yesterday faced stern criticism from the US and British representatives before being directed by the Security Council to relay its condemnation of this week's violence to his Government.

The president of the Security Council, Mr Peter van Walsum of the Netherlands, later said that the council had demanded that the Indonesian Government take immediate steps to prevent more violence.

Mr Annan yesterday called on Indonesia to ensure that those responsible for the violence were arrested.

UN officials said the Secretary-General had been making regular telephone calls to the Indonesian President, Dr B.J.Habibie, and the Foreign Minister, Mr Ali Alatas, to reinforce the UN's concerns.

Portugal's UN ambassador, Mr Antonio Monteiro, urged the Security Council to bring forward its contingency plans for a major peacekeeping presence in East Timor.

"We want the council to consider the need to reinforce security, including a UN force if the Indonesian authorities cannot keep the peace," he said.

"We want the president of the council to be aware that members would have to act very quickly if an emergency arises. A force, if needed, could help the Indonesians perform their duties." But Mr Annan's spokesman later said that no formal moves were being made towards assembling a force.

He said the agreement between the UN, Indonesia and Portugal establishing the framework for the East Timorese self- determination process was explicit in leaving security issues in Indonesia's hands. That position had not been changed by this week's killings, he said.

Portugal's push for peacekeepers highlighted growing tensions between it and Indonesia.

All countries, other than Australia and Indonesia, recognise Portugal as the country with administrative control over its former colony of East Timor.

UN officials said last night that Portugal had pressed the issue of UN peacekeepers at a meeting of senior officials from the UN, Indonesia and Portugal in Lisbon last week.

Indonesia was given a draft UN plan outlining its intention to send in as many as 15,000 peacekeepers in the final phase of self-determination if this week's poll results in a move towards independence.

The Indonesians countered with concerns that Portugal might seek to resume formal control of East Timor if the outcome of the ballot forces Jakarta to relinquish its claims of sovereignty over the island territory.

The agreement signed by Mr Alatas and his Portuguese counterpart, Mr Jaime Gama, stipulates that the territory would fall under UN administration in what is expected to be a prolonged transitional period of up to four years if the East Timorese opt for independence.

Police 'stand back as homes torched'

Ian Timberlake, Dili -- Furious United Nations staff -- evacuated from Maliana following the murders of two UN poll workers in the district -- yesterday blasted Indonesian police for doing nothing while anti-independence militiamen rampaged.

A 38-car convoy from Maliana, carrying 40 foreign and 14 local UN staff, arrived at the UN Assistance Mission in East Timor (Unamet) headquarters in the capital Dili yesterday afternoon, with some saying Maliana was in anarchy. The Unamet staff had sought refuge in the Maliana police station after the militia went on the rampage and torched houses.

"I haven't seen one ounce of police work since I got into this country," one of those evacuated said. "They have got to have an international [peacekeeping] force in here. The Timorese people are at their [the militias'] mercy."

Another UN officer called the situation in Maliana a disaster. "It is just surrounded by fire and smoke. The militia just roam free with their weapons," the officer said.

"There were houses burning all around town this morning," another said. "Nobody did anything to stop it either. The TNI [Indonesian military] did absolutely zilch." He said some houses were burning next to an Indonesian police compound and "the police were doing nothing".

The two dead East Timorese workers were a driver and an interpreter for Unamet. They were murdered in the early evening about 200 metres from the UN compound as they headed for home, a Unamet source said.

"We believe they were killed by pro-Indonesian militias. We believe they were macheted to death. Of course, all our locally employed staff had received threats continually," the source said.

After the murders, Unamet grouped all its personnel together. They spent the night surrounded by burning houses and the continual sound of gunfire, some apparently coming from automatic rifles. They fired "hundreds and hundreds of rounds," a UN civilian police officer said.

When the convoy left the town, 75km southwest of Dili, it was escorted by Indonesian police, many of whom had also fled Maliana, one officer said. The convoy passed through several armed militia road blocks on its way to Dili.

East Timor's Human Rights and Justice Foundation said observers in Maliana had confirmed three civilians had been shot dead there by Dadalus Merah Putih militiamen.

In a separate evacuation, four members of the International Federation for East Timor-Observer Project were on their way to West Timor under Indonesian police escort. In Liquica, another militia-ruled town 35km west of Dili, there were no plans yet to evacuate UN staff, Unamet spokesman David Wimhurst said. Militiamen had virtually taken over Liquica and torched about 30 houses on Thursday.

Some 75 journalists, mostly foreigners but also Indonesians working for overseas media, left East Timor for Bali aboard a BBC-chartered aircraft.

The Safety Office for Media in East Timor issued a "high alert" for journalists, cautioning them to avoid unnecessary travel and not to go out alone. Pro-Indonesian militiamen were reported to have told Indonesian journalists of a plan to go on a fresh rampage in Dili today.

Gangs expand domain

Lindsay Murdoch, Dili -- A skinny boy in filthy threadbare clothes hangs around my hotel. Ameu, 10, is a good kid, keeping an eye on my room when I am out. He has suffered a great deal; both his mother and father are dead. This morning he was running his finger along the blade of a sharp dagger. I asked him where he got it but he just shrugged. "I will not be killed," he said.

Everybody in East Timor seems to be scared. East Timorese have suspected for days something was terribly wrong. That's when almost everybody except Mr Eurico Guterres' gang members deserted the potholed streets of Dili.

The word is that many people have taken to the mountains, just like tens of thousands of them did in 1975 when Indonesia's troops invaded and started beating and killing people. Others only venture out to buy essential goods from shops that open briefly or not at all. Thousands have taken refuge in school or church grounds.

We haven't seen much this week of Mr Guterres, the commander of one of the biggest militia groups -- Aitarak, or Thorn. He presided over the funeral of one of his men, a cousin. A few hours later, Aitarak men wielding machetes were caught on television hacking a man to pieces only metres from the United Nations headquarters in Dili.

The killing of another man, Placido Ximenes, 41, shows how this conflict is rapidly deteriorating into a vicious cycle of violence, perhaps even civil war.

Mr Ximenes was riding his motorcycle along a road through the suburb of Becora, which is a stronghold for independence supporters in Dili. He was pulled off his bike by a group and bashed. Apparently the most vicious attacker was a big-muscled pro-independence supporter known as Rambo.

CNN showed Rambo dragging an unconscious Mr Ximenes along the road as others jumped on him. He was thrown into a taxi and then, according to Aitarak, buried alive in a river bed. The body was unrecognisable when it was recovered.

Unlike the hundreds of other murders committed by Aitarak, the death is not the end of the story. From the white-washed, rambling jail house in Jakarta that he cannot leave, the pro- independence leader, Jose "Xanana" Gusmao, apparently saw the CNN footage and was appalled, even if Mr Ximenes was from the enemy camp.

Mr Gusmao, a former guerrilla leader recognised by almost everybody in this conflict as the strongest force for reconciliation, telephoned Rambo. Within hours the man had surrendered to Indonesian police, obeying the order of his commander even if it meant spending the rest of his life in jail.

Four days after the euphoria of 438,000 eligible people voting on East Timor's future, Dili is rife with rumors. A full-on attack by the militias is imminent, one has it. They want to kill a large number of people so that all the UN people and journalists will go away, goes another. The militias are roaming the streets looking to kill a foreign journalist wearing a red hat, said yet another.

The militias seem to want to terrorise everybody, apparently in revenge for the ballot they believe they have lost. Most of the UN staff members and journalists who stay at my hotel were away yesterday morning when six militiamen brandishing home-made pistols ran into the lobby, screaming threats.

As a few us locked ourselves in my bathroom, they roughed up a Canadian woman eating a late breakfast in the restaurant. They told her and the terrified staff they would be back later to kill a foreign journalist. Only a few of the bravest staff stayed to find out that they didn't.

Mr David Wimhurst is a hardened UN worker, having served as spokesman for the world body's bloody operation in Angola. He is disappointed that foreign journalists are pulling out of East Timor just before the ballot result is known.

"Your presence has been crucial here," he said. "While the UN cannot guarantee your safety, your continued observation of the process is important. I hope as many of you as possible will stay to see it through."

But the words were little comfort. Mr Wimhurst admits the security situation is spiralling out of control. The news outside Dili shows the militia killing and burning.

In the town of Maliana, they rampaged for hours, burning houses and hunting down locally employed UN staff members. Two are dead and five missing. Thirty-three UN staff have taken shelter in a police office. The UN headquarters is deserted. The coffee- growing town of Gleno is now militia territory.

Even the police apparently cowed. Houses in Liquica, where 60 Minutes reporter Richard Carleton provoked militias this week, were burning. A church has been attacked in Becora. The list of trouble spots seems endless.

The militias appear to control all roads from Dili. At roadblocks militias armed with automatic rifles mingle with Indonesian police and soldiers, who kowtow to them.

We try to see what is happening outside Dili but militiamen drag us out of the car 14 kilometres along the road to Hera. We lie that we are French because we know they hate Australian journalists.

As our car reaches a mountain peak five kilometres towards Dili, 20 independence supporters suddenly appear, waving us down. They are carrying swords, bows and arrows and machetes. "If the Aitarak try to come on this road to Dili we will kill them," said one man clutching a large sword. "They have rifles and guns. We don't care. If they come it will be war."

But less than an hour later the ABC's Tim Lester calls from the same spot. "The independence boys have gone and Aitarak are here," he said.

Megawati "sad" over independence vote

Jakarta -- Indonesian opposition leader and presidential candidate Megawati Sukarnoputri said Saturday she was "very sad" East Timor had voted overwhelmingly for independence.

Megawati, who had opposed the separation of East Timor, said she was "very concerned and very sad about the autonomy ballot's result," the Suara Pembaruan evening daily reported.

"For me, the most important issue was not the result of the ballot itself, but rather things that might happen after the poll result ... especially the refugees issue," she told journalists in the city of Yogyakarta, central Java.

While Megawati, the daughter of Indonesia's founding president Sukarno, opposes independence for East Timor, she has said she will respect the ballot's outcome.

The research and development deputy chief of Megawati's Indonesian Democracy Party-Struggle [PDIP], Subagio Anam, expressed concern East Timor could set a precedent for other restive provinces in Indonesia. "Giving the broad autonomy offer to one specific region was a political mistake, since this could set a precedent for other troubled provinces such as Aceh and Ambon," he told AFP.

He restated the PDIP's stance that President B.J. Habibie had violated the Indonesian constitution by offering East Timor broad autonomy, which was turned down overwhelmingly according to poll results announced by the UN Saturday. "Habibie is a transitional president ... so if he wanted to alter Indonesia's political map, he should have asked permission from the People's Consultative Assembly," he said.

The assembly, Indonesia's supreme legislative body, which ratified the forcible incorporation of East Timor into Indonesia in 1976, must now vote on whether to let the former Portuguese territory go its own way.

The evening daily also quoted ruling Golkar party chairman Akbar Tanjung as saying he found East Timor's rejection of the autonomy offer wholly unexpected.

During a trip to the territory last month to campaign for autonomy, Tanjung was optimistic East Timorese would opt to stay with Indonesia.

"The astounding result of the popular consultation was something beyond my expectations. This is something that is very shocking," Tanjung was quoted as saying Saturday.

He also called on the government to welcome and help many Indonesians and pro-autonomy East Timorese who were fleeing the territory as it moves towards independence.

The PDIP topped June 7 national elections with 33.7 percent of the vote, with Habibie's Golkar trailing in second place on 22 percent.

The PDIP has secured 153 parliamentary seats, while Golkar has 120. Megawati's party did not win enough seats to guarantee her selection as president when the People's Consultative Assembly convenes from October.

The legislative session will be the first electoral test for Habibie since he replaced former president Suharto in May last year.

Xanana wants international force

Jakarta -- Leader of the National Council for East Timorese Resistance (CNRT) Xanana Gusmao hails the Aug. 30 ballot results as a victory for all East Timorese and calls for an immediate presence of an international force in East Timor to protect the people from the Indonesian Military (TNI).

"TNI has not abided by the May 5 agreement and has 15,000 TNI `troops, 8,000 policemen and 2,000 members of the Army's Elite Forces [Kopassus] in the territory. Indonesia might as well deny East Timorese people their freedom," a pensive and glassy eyed Xanana told reporters Saturday following the announcement of the ballot results.

He said the presence of Indonesian security forces in the territory showed that either TNI Chief Gen. Wiranto was unable to control his men or was unwilling to do so.

TNI spokesman Brig. Gen. Sudradjat meanwhile said TNI accepted the ballot results with all sincerity.

Sudradjat said TNI and the police would remain in East Timor until the end of November as mandated by the May 5 tripartite agreement. Until then, they would work closely with the United Nations to maintain security and peace in East Timor, Sudradjat said as quoted by Antara.

Dili Bishop Belo appealed on all East Timorese to forgive each other and as brothers accept the ballot results with an open heart.

"Let's forget the bitter past and welcome a promising future," the bishop said in an interview with Antara. "East Timor belongs to all people with goodwill, people who want a peaceful, just, democratic and prosperous East Timor," he said.

RI to respect vote results, maintain order

Jakarta -- President B.J. Habibie pledged Saturday to honor East Timor's decision to reject Indonesia's offer for a special autonomy and ordered the military and police to maintain law and order in the territory until the United Nations assumes transitional authority pending elections for a new government.

East Timor has voted overwhelmingly for independence from Indonesia, with 78.5 percent of the ballots favouring separation from Jakarta and only 21 percent supporting autonomy under continued Indonesian rule. The vote count was 344,580 against autonomy and thus in favour of independence, and 94,388 for autonomy.

Habibie urged [prointegration] East Timorese and Indonesians to accept the bitter pill. "The majority of our brothers and sisters in East Timor have voted against the special autonomy offer made by the government of the Republic of Indonesia. We have to accept the fact with an open heart," Habibie said in a televised speech following the announcement of the results of the Aug. 30 ballot. The announcement came three days earlier than originally planned on Sept. 7.

Habibie said the government would report the ballot results to the People's Consultative Assembly, which will convene in November. "While waiting for the Assembly to make its decision, I appeal to all East Timorese to reconcile and work together to maintain security and order. More importantly, we need to prevent more innocent people from becoming victims," said Habibie.

He also ordered the Indonesian military and police to take stern measures against all parties that disrupt security and order in East Timor.

East Timor votes to quit Indonesia

New York, Friday: East Timor voted overwhelmingly to break its ties with Indonesia in favour of independence, UN Secretary- General Kofi Annan announced here tonight.

More than 23 years after Indonesia invaded the former Portuguese colony, the voters rejected wide-ranging autonomy within Indonesia by 78.5 percent, he said.

"There are no winners or losers," Annan told a hushed open meeting of the U.N. Security Council. East Timor will not become independent immediately.

Indonesia's legislature must implement the result of the ballot, and it is not expected to meet until November. Then, Indonesia would turn over responsibility for East Timor to the United Nations.

Jose Ramos Horta, East Timor's Nobel Peace Prize winner and independence leader, has said the United Nations should run the territory during a three-year transition to independence.

Timorese voters selected between two choices on the ballot: "Do you accept the proposed special autonomy for East Timor within the Unitary State of the Republic of Indonesia?" or "Do you reject the proposed special autonomy for East Timor, leading to East Timor's separation from Indonesia?"

Annan said 94,388 voters, or 21.5 percent, checked the box which accepted autonomy. He said 344,580, or 78.5 percent, checked the box which rejected autonomy.

There were 446,953 ballots cast and 438,968 were valid.

"The people of East Timor have thus rejected the proposed special autonomy and expressed their wish to begin a process of transition towards independence," Annan said.

Violence has escalated since Indonesian President B.J. Habibie offered to grant East Timor independence if voters rejected autonomy.

Anti-independence militias have been rampaging through the territory, forcing thousands to flee and killing civilians and U.N. staff. Calls for a UN peacekeeping force have been increasing.

"Today, I ask all parties to bring to an end the violence which for 24 years has caused untold suffering to East Timor," Annan said.

Under the May 5 agreement signed by Indonesia and Portugal which authorized the United Nations to organize the Aug. 30 ballot, Indonesia remains responsible for security until the legislature meets in November.

Annan urged the Indonesian government to ensure the successful culmination of the ballot by carrying out its responsibility to maintain law and order.

"After 24 years of conflict, East Timor now stands on the threshold of what we all hope will be a process of orderly and peaceful transition towards independence," he said.

"The coming days, however, will require patience and calm from the people of East Timor. I hardly need stress how important it is for its leaders to exercise wisdom and reason," Annan said.

He urged all parties to seize the opportunity to lay the foundation for an era of peace and stability for all future generations of East Timorese.

"Those who voted to accept the proposed special autonomy must not consider this outcome a loss. Nor indeed should the majority consider it a victory; for there are no winners and no losers today. Rather, this moment heralds the opportunity for all East Timorese to begin to forge together a common future in what is to become an independent East Timor."

Militias pack Dili as independence chosen

Dili -- Shots rang out in the East Timorese capital Saturday as roaming gangs of pro-Indonesian militiamen forestalled any celebrations of the territory's historic vote for independence.

Independence supporters continued to abandon their homes in fear of violence, while Indonesian families headed to shelter in police stations and churces or out of East Timor altogether on ferries.

Sporadic shots were heard near the United Nations compound in the capital Dili and near a hotel in the centre of the city, where UN workers and foreign journalists are staying.

One militiaman furiously harangued scared journalists, but there was no immediate report of casualties.

Files of refugees, families carrying all they could carry, streamed towards the hills around Dili and churches. Four steamers left the harbour carrying Indonesian families, while others headed to police and military installations.

Among those leaving from Dili's Comoro airport was Eurico Guterres, the commander of the Aitarak militia which has waged a campaign of terror in the city over recent months.

"I am leaving for Jakarta but I will be back tomorrow," Guterres said after earlier vowing to stop any East Timorese leaders from leaving the territory.

He said his camp accepted the outcome of the vote but warned "there is still the problem of the 21 percent," the number who voted for autonomy under Indonesia.

In Jakarta, jailed East Timorese separatist leader Xanana Gusmao urged the UN Security Council to urgently send an international peacekeeping force to prevent a "genocide" following the result.

Pro-Indonesia militiamen, from the local Aitarak militia and from the equally feared Red and White Iron group, were patrolling on trucks and motorcycles from before the vote announcement was made early Saturday.

At Dili's Mahkota hotel, where the result was released simultaneously with UN chief Kofi Annan's announcement in New York, tears of joy greeted news that 78.5 percent of voters had rejected autonomy.

A young hotel employee, her eyes brimming with tears, threw her arms around an AFP correspondent and whispered in a choked voice: "I am so happy."

Carlos, an interpreter, paid tribute to the UN Mission in East Timor (UNAMET), which organised last Monday's self-determination vote.

"I am happy. It was how I voted. This was the democratic way. I am very grateful to UNAMET ... it was honest, just and fair. Hopefully no one comes and disturbs it," he said.

But outside the hotel, whole areas of Dili were deserted as fearful residents had fled to the hills for safety ahead of the ballot announcement,

An Aitarak member, incensed by a journalist trying to take a photograph of him carrying a homemade gun, easily broke through a cordon of armed Indonesian police in front of the Mahkota.

He threatened journalists in the hotel lobby with his weapon before policemen escorted him away, not bothering to confiscate the firearm.

Shots were fired around the corner of the hotel a few hours after the announcement and a rapid succession of single shots was also heard in the area around Dili's central market.

An AFP photographer said a volley of shots, apparently from an automatic rifle, was heard in a pro-independence neighbourhood near the UN compound. Smoke billowed from a burning house in the deserted area, the photographer said.

Military and police trucks could be seen ferrying furniture and other items to the port.

Heading to the port was a group of three migrant families from the Indonesian province of East Java, followed by a pickup truck carrying all their possessions including a refrigerator. "We would have stayed if it was autonomy," said the head of one of the families.

At Comoro airport, Indonesians thronged awaiting to leave on a Hercules military transport plane, while others were hoping to board the day's only commercial flight out.

At a central tailors, employees were nailing boards over the front windows. "There are no customers," they said. When shown the vote result, one said: "We are happy."

Police stand by as militias attack

Dili -- Hundreds of anti-independence militiamen blocked the street outside the UN headquarters in East Timor's capital Wednesday, setting on fire a nearby house and shooting cars driving into the UN compound.

A taxi carrying journalists to the scene was fired on and had its rear window smashed by militiamen.

The violence came as the United Nations began counting ballots Wednesday in East Timor's historic referendum, a vote that was expected to approve the territory's independence from Indonesia.

It wasn't clear if the militiamen had broken into the compound. Dark smoke billowed from the raging fire near the complex. Indonesian soldiers stood by, but didn't intervene to stop the rioting.

Earlier in Dili, hundreds of armed anti-independence militiamen gathered in the capital's streets, and at least one person was killed.

Dozens of militiamen fired weapons near the entrance of the UN headquarters in Dili. A UN security officer confirmed that about 150 people -- including UN officials and journalists -- had taken shelter in an auditorium in the compound.

Wednesday's attack was the most serious against the United Nations since the world body took over organization of the vote in May. UN workers were attacked before the vote. One was killed Monday, and two are feared dead -- victims of attacks just after the vote.

Gunshots rang out Tuesday night in one town, and residents accused the militants of killing a family of eight. In Dili, police said a teen-ager was shot to death.

The violence followed Monday's relatively peaceful referendum on independence. The outbreak raised fears that the territory could slide back into lawlessness as pro-Indonesia militias -- sensing defeat -- try frantically to take control of whatever they can.

The militias, believed to be backed by Indonesia's military, have accused the United Nations of rigging the vote to encourage independence. The referendum gave East Timorese the option of breaking away from Indonesia, or remaining part of it with autonomy.

The Timorese people vote today!

Steven Gan -- Today the people will decide. After 23 years of brutal Indonesian occupation, East Timorese will be given a choice: independence or autonomy. Some 450,000 people are due to vote in a historic referendum to either opt for a union with Indonesia or to put their half-island on the road to eventual independence.

A simple choice indeed. However, that decision had already been made more than two decades ago, and it is not going to change despite the recent violence by elements of the Indonesian military and their pro-integration militias to skew the vote in Jakarta's favour. Come today, the majority will choose, for better or worse, for East Timor to go it alone.

The road to freedom hasn't been easy. East Timor, a small territory in the eastern half of the Indonesian archipelago, declared independence from Portugal on Nov 28, 1975 after almost 300 years of colonialism.

Nine days later thousands of Indonesian paratroopers landed in Dili to begin a reign of terror that continues to this day.

That invasion was condemned by the United Nations Security Council. However, UN resolutions calling for the withdrawal of Indonesian troops and for East Timorese to be given the right of self-determination were ignored. Instead, for 30 years Western countries courted Suharto, the man who ordered the aggression.

Australia even went as far as recognising the annexation of East Timor by Indonesia.

Some 200,000 East Timorese, estimated to be around one-third of the population, died during the military crack-down and famine that follow. It was a genocide comparable to Pol Pot's Cambodia. Those who resisted were kidnapped, tortured, raped and buried in anonymous graves.

A few foreigners, too, lost their lives. Among them were five Australia-based journalists, killed in the East Timor border village of Balibo. An independent inquiry found that they had not been killed in crossfire during a skirmish as alleged by Indonesia but mown down in cold blood by invading troops.

Also shot dead was Malaysian student Kamal Bamadhaj. Kamal was in Dili as a translator for an Australian aid organisation in 1992 when Indonesian soldiers opened fire on mourners of a murdered activist at the Santa Cruz cemetery. At least 180 people, including Kamal, were killed in the massacre.

The deaths of their citizens, however, received a muted response from both Canberra and Kuala Lumpur.

That wasn't too surprising. After all, Australia sought to curry favour with the Suharto regime for lucrative business contracts while Malaysia turned a blind eye to the murder in the name of Asean brotherhood and solidarity.

The struggle in East Timor could have been easily forgotten by the world if not for the tenacity and determination of those resisting the Indonesian occupation. Their rag-tag rebel group kept the Indonesian military, whose elite forces were armed and trained by Western powers, on its toes. East Timorese in exile, led by Nobel Peace laureate Jose Ramos Horta, also dedicated much of their time and effort to marshalling global opinion against the Suharto regime.

But when the offer of a referendum came early this year from President B J Habibie, just about everyone was taken by surprise. Even independence advocates did not foresee that such a vote would come so soon, so that they had earlier mooted a peace plan that involved giving East Timor autonomy in the short term and a referendum to determine its own future in perhaps five or even 10 years.

The Indonesian military too were flabbergasted. Infuriated and knowing full well that East Timorese would not vote to stay with a nation that had treated them so harshly, they began scheming to have the vote called off or, if that was not possible, to ensure that the vote for autonomy would win the day.

Mysteriously, a crop of pro-Jakarta militia groups emerged to campaign, often violently, in favour of union with Indonesia.

Not surprisingly, the two-week campaign period in the run-up to the ballot saw a great number of pro-Jakarta rallies. Clearly the pro-independence forces were too intimidated to campaign openly.

Never mind, said jailed rebel leader Xanana Gusmao. "We have been campaigning for 23 years, he said.

He, like most people but for the Indonesian military and its militia cohorts, is confident that the vote will be an emphatic "No" to autonomy.

There are pervasive fears that the military-backed militias will launch a wave of terror around, or shortly after, the time of the ballot in an effort to derail the referendum. Already they have called for war if the vote does not go their way. Last week the International Federation for East Timor Observer Project, the largest international observer mission in the territory, sent an urgent appeal to UN Sec-Gen Kofi Annan.

"The UN must act quickly to ensure that the vote, and the days and weeks following the vote, are times of peace and not of slaughter," it urged.

There is no question that the ballot must go ahead. To postpone it for the third time would mean a victory to the forces of violence. In response to the mounting violence, the UN has increased the number of its police personnel in the troubled territory, but that is not good enough. Many have called for armed peace-keepers to be deployed immediately to stop the possible outbreak of another civil war. That call has, however, gone unheeded.

"I'm the witness to the suffering of my struggling people, and I'll bear witness to their liberation." These words were written on one of Kamal Bamadhaj's favourite T-shirts. Kamal did not live to witness the liberation of East Timor. Neither did many thousands of others whose graves litter the desolate landscape of East Timor, but their deaths will not be in vain.

Today, at long last, the people of East Timor will witness their own liberation. In the coming days and weeks, however, the world will decide whether East Timor will indeed witness peace, not slaughter.

Jakarta split on foreign force

Craig Skehan, Jakarta -- Differences have emerged within the Indonesian Government over whether international peacekeepers could be needed in East Timor after tomorrow's announcement of results from the self-determination ballot.

The Justice Minister, Mr Muladi, and elements of the military have publicly acknowledged that early deployment of UN peacekeepers could be necessary.

But the Foreign Minister, Mr Ali Alatas, and the defence chief, General Wiranto, are publicly maintaining that Indonesia won't give up its security responsibilities in East Timor before parliamentary ratification of Monday's ballot. "That won't happen before November," Mr Alatas was quoted as saying in the Indonesian Observer newspaper.

General Wiranto, who is sending more troops to East Timor and flying there himself tomorrow, also asserted that Indonesia could control the security situation despite worsening violence.

Mr Muladi said Indonesia's priority would be for its own forces to exert their authority. But he said that if the situation deteriorated rapidly, the use of of UN forces would be considered.

An Australian official said today that because of the sovereignty issues at stake, it could take a "cataclysmic" breakdown of law and order in East Timor for Jakarta to allow outside intervention before November.

Australia's Foreign Minister, Mr Alexander Downer, has for months defended Indonesia's refusal to agree to an armed international peacekeeping force.

If violence escalates dramatically, the Indonesian Government might want to soften international condemnation of its failure to bring anti-independence militias under control.

Canberra, too, has a lot at stake. If East Timor degenerates into civil war, the Federal Opposition will attack Mr Downer for his earlier efforts to help quell international calls for outside intervention.

Mr Downer was quick, after the relatively peaceful conduct of the self-determination ballot on Monday, to say he had been vindicated, but this assertion has been undermined by the violence of recent days.

Long tradition of using gangsters

Vaudine England, Jakarta -- Indonesia's armed forces have long used street gangs and self-styled militia to do their dirty work, with East Timor simply providing a contemporary example of a pattern which goes back to at least the 1940s.

Many of the army's earliest leaders themselves came from the local militia set up by the Japanese occupying forces during World War II.

Of relevance to the militias now active in East Timor is the state's attitude to such gangs once the dirty work is done.

In the early 1980s, gangsters were recruited to participate in campaigning for the 1982 elections, acting as bully boys and provocateurs to make sure of then president Suharto's continued dominance. Once they were no longer needed, thousands of them were exterminated -- murdered in "mystery killings" that lasted until 1984.

Much of the violence that has broken out across Indonesia since Mr Suharto's fall in May last year has been blamed on "provocateurs" or "a third force". So it is in East Timor.

Information Minister Yunus Yosfiah argues that militias only sprouted suddenly in East Timor this year because the many native East Timorese, who genuinely support continued integration with Indonesia, felt a real need for protection in the wake of President Bacharuddin Habibie's offer of independence to the territory.

There is no doubt an element of truth in this, but the mushrooming of up to a dozen different groups of men with guns, matching T-shirts, berets, government-issue M-16 rifles and plans of campaign suggests more organisation is involved than merely a spontaneous growth of neighbourhood protection units would provide.

Moreover, some of the militias now active in East Timor have existed since Indonesia's 1975 invasion. Their job, then and now, has been to support the military's hypothesis that the problem in East Timor is a long-running civil war, not Indonesia's occupation.

This is why the pro-independence movement has decided to turn the other cheek as much as possible in recent weeks, hoping not to be drawn into any fighting which would prove the military correct.

Complicating the matter further is the fact that it is not "the military" as such which is directly sponsoring the militias, but certain hardline elements within it who trace their allegiance not to armed forces chief General Wiranto but to disgraced former special forces chief (and Suharto son-in-law) Prabowo Subianto.

For as long as the militias help make the Timorese civil war myth into reality, they will remain part of the anti-independence arsenal.

Jakarta plays knife-edge diplomacy

Vaudine England, Jakarta -- When Indonesia-backed militias go on the rampage in East Timor, threatening the United Nations, the East Timorese and local and foreign observers, reactions in Jakarta vary from outright denial to ashamed recognition of national failure.

But at an international level Jakarta plays a knife-edge game of appeasing foreign critics while insisting on control of the increasingly flawed security situation on the ground.

State Secretary Muladi's statement yesterday that a peacekeeping force might have to be considered at some point for East Timor is at once an admission of the failure of Indonesian police and soldiers to keep the peace, and a deft concession to international opinion. But it may be no more than that.

Even if a peacekeeping force was considered, such talk would mean nothing to those people in East Timor, who are being terrorised and attacked.

The main issue for most observers is the way local gangs of pro-Indonesia militia can walk around freely with the open acceptance, if not support, of Indonesian soldiers and police.

This allegation, of Indonesian military support for the thuggery in East Timor, is supported by all independent eye-witness accounts of the violence.

Examples given by respected commentators on the ground have included militia members at Dili airport preventing Timorese and Indonesian families from leaving, while Indonesian airport police simply watched.

When a prisoner of a militia group in Dili fled to the army barracks for shelter, the army let the militia in to retrieve the man.

When militias in Ermera district fired at a UN helicopter trying to take out ballot boxes for counting and pointed an M-16 assault rifle at an unarmed UN policeman, Indonesian police stood by and watched.

BBC reporters, who were beaten by militias during Wednesday's violence, insisted yesterday the military not only stood by and watched, but actively helped organise militia activity.

But in Jakarta, army spokesman Brigadier-General Sudrajat denied the evidence of military complicity and said the situation was not as bad as reported, while Foreign Ministry spokesman Sulaiman Abdulmanan said: "It is not policy to help the militias."

Members of the Jakarta political elite see the latest developments in East Timor as both humiliating and damaging to the Government of President Bacharuddin Habibie.

"Such statements are increasingly hard to swallow," said a former cabinet minister, who is now aligned with the reform movement in Indonesia, of the military's denials.

"The TNI [Indonesian armed forces] is forever saying one thing and doing another. They are looking like a bunch of compulsive liars -- both Habibie and the military. Indonesia has to take a major part of the blame for what's happening," the former minister said.

A large part of the problem remains the political stalemate in Jakarta. President Habibie could well be out of his job in two months' time, and armed forces chief General Wiranto would like his job, or the vice-presidency.

Mr Habibie needs military compliance to stay in office and must balance that against loss of face abroad, while General Wiranto needs to keep his troops united and supported if he is to have any political future at home.

The question is whether the cost of international condemnation will be higher for these two men than the cost of altering the delicate power balance between them.

US$47 billion threat will plug boodbath

David Jenkins -- The Indonesian Government was in disarray yesterday over the escalating violence in East Timor, with the civilian government of President B. J. Habibie wringing its hands and hinting at a possible foreign peacekeeping force as an increasingly defiant army showed no sign it was willing to stop instigating the unrest.

It now seems that nothing short of an international threat to pull the plug on a $US43 billion IMF bailout of the stricken Indonesian economy will succeed in persuading Habibie to rein in his generals, who have made it plain in private briefings that they are determined to hold on to East Timor at all costs.

A freeze on the disbursement of emergency aid could have a devastating effect on Indonesia's fragile economy, sending the rupiah into a new decline.

And as East Timor edges closer to anarchy, the Indonesian Army (TNI) is looking for all the world like a runaway institution, supporting the policies of Habibie in public but working assiduously to undermine them in private.

"The only way to avoid a bloodbath and end the conflict is for the world community to apply high-level economic pressure on the central government," said a Jakarta analyst with high-level army contacts.

"They will have to feel the intensity of the pressure. If it is only statements of concern they won't take it seriously. Indonesians believe in concrete things, in cash. Only if you withhold the cash and squeeze them will they listen.

"The outside world has to say we will not dispurse further credit and will advise tourists not to come to the eastern part of Indonesia, meaning Bali. It is no good threatening to send in a peacekeeping force, as New Zealand has suggested. That will produce a nationalist backlash and greater defiance."

Four days after the successful United Nations ballot in East Timor, prominent members of the Jakarta foreign policy elite are expressing dismay and disbelief at the behaviour of the army and police in the territory. It is no secret in Jakarta that the army is behind the militia gangs sowing terror there.

"I just don't know what is going on," said Sabam Siagian, a former Indonesian ambassador to Australia. "On the referendum day it was quiet and in the following days one can't help get the impression that it was orchestrated.

"One day the Indonesian Army and police can control the situation. The next day they either acquiesce or can't control it. "What's the political plan? It doesn't make any sense any more. From our side, what's the scenario? Just to create a mess? What for? Isn't Jakarta aware that the Western powers, especially Washington, are using East Timor as a yardstick to judge whether the Indonesian Government will adhere to an agreement?"

It was plain, even from television coverage, that Indonesian security forces acquiesced in the rioting, he said.

"The question is, what's the political scenario? While Indonesia is in dire need of international assistance that only the Western powers can provide, either bilaterally or through multilateral institutions such as the World Bank and the IMF, we are shooting ourselves in the foot. All in all, it's very disturbing."

Similar views are expressed by retired military officers, a number of whom have held key diplomatic postings.

"I don't see any strategy [behind the current violence]", said Lieutenant General Hasnan Habib, a former Indonesian ambassador in Washington and Bangkok, whose last posting was roving ambassador to the Non-Aligned Movement. "It would have been much more logical if they had done this before the voting took place."

According to a civilian adviser who has worked closely with the army on East Timor, "the current army policy is reckless. There is no advanced strategic thinking. "Three weeks ago these [top army] people said, `There is no way we will give independence to the Timorese. If they win by the ballot, we will win by the bullet'.

"But yesterday when [UN Secretary-General] Kofi Annan and the United States and the entire world was crying out, they began to panic. They do not know what to do. But beneath the surface they are [still] instigating violence. This is all a mess. They have embarked on half-baked operations without proper planning, just emotion."

Another source in the capital said: "Many in the military don't yet comprehend that they can be told by a civilian president -- a weak, illegitimate joker of a president -- what to do."

The Defence Minister and armed forces chief, General Wiranto, was a weak commander, and the Foreign Minister, Ali Alatas, was "tired of Timor", the source said.

Fear grips town as militias muscle in

Mark Dodd, Gleno -- Indonesian authorities have lost control of the strategic coffee-growing district town of Gleno which is now in the hands of hundreds of pro-Jakarta militia.

Yesterday afternoon a Herald journalist saw widespread destruction of property, including houses burning, and militia checkpoints throughout the town.

There was virtually no sign of any official authority, with government offices closed along with markets and shops. The only bakery was torched by militia yesterday morning.

The 45-kilometre road leading out of Dili up into the mountains to Gleno passes through at least six roadblocks manned by the Aitarak and Besih Merah Putih militia. A police or army escort is needed to bypass them safely.

Militia have threatened to capture and kill an Australian journalist over what they see as the negative portrayal of the pro-integration case. This situation has been worsened by the militia dispute involving the 60 Minutes reporter Richard Carleton, who was expelled from East Timor on Wednesday.

Yesterday afternoon, Gleno was mostly deserted. The market was closed and the only activity apart from an occasional speeding United Nations vehicle was gangs of surly-faced militia loitering on street corners and manning checkpoints.

Truckloads of militia continued to arrive in the town yesterday afternoon and civil servants were seen leaving on their motorcycles.

Gleno seemed more like a militia-run ghost town. The police headquarters, normally a bustling district office, was more like a military camp reinforced with heavily armed Mobile Brigade Police at the entrance.

The police chief, Colonel Erry Gulthom, has received death threats from the militia for being a "traitor to the autonomy cause".

He told the Herald that he was concerned about security in the town and provided a heavily armed police escort to ensure safe passage back to Dili.

"The situation here is changing hour by hour -- it is very unpredictable," Colonel Gulthom said. "It was very peaceful here until voting day."

A UN electoral observer, Mr Mark Plunkett, a former UN special prosecutor in Cambodia, said: "It has been to date a fair inference that Indonesia has been unable to discharge its obligations for law and order under the tripartite agreement.

"Sadly, today they now candidly admit they are unable to do so in the district town of Gleno. A bunch of street thugs and hooligans should not be allowed to stand over Indonesia, let alone the international community."

On Wednesday, the UN Secretary-General, Mr Kofi Annan, issued a statement condemning violence outside the headquarters of the UN Mission in East Timor (Unamet) in which two people died.

The death toll is feared to be considerably higher in suburbs outside Dili but now considered too dangerous to reach.

Reliable Indonesian police sources told of factions within the police. One Gleno-based police intelligence officer was alleged to be receiving orders from Dili that instructed his officers not to intervene against the militia.

Many Brimob Police are angry and frustrated at the situation. "I've been here for nine years. Now I want to get out," said one Balinese officer.

A house next to a UN Civilian Police (UN Civpol) residence was burnt to the ground on Wednesday night as a warning that the police would be targeted next. Yesterday they were moving to safer premises at the main UN office in Gleno.

"I'll tell you the situation in Gleno," said one UN police officer. "The militia are burning houses and setting up road blocks and the [Indonesian] police can't do a thing to stop it."

At 6pm on Wednesday Colonel Gulthom told UN Civpol he could no longer guarantee protection for its staff in Gleno because of the deteriorating security. On Tuesday, a Civpol team led a 17- vehicle convoy out of the town after violence erupted after Monday's polling.

Dili was gripped with tension and fear yesterday as rumours swirled of an imminent wave of militia violence triggered by the huge voter turnout. Militia roadblocks in Dili begin just outside the airport, about five kilometres west of the city centre.

There are unconfirmed reports that militia in the East Timorese enclave of Oecussi have been ordered to move their base to Dili. Many Indonesian and foreign media crews have already left Dili and others have booked on special evacuation charter flights.

The daily UN news briefing yesterday was attended by about 150 reporters, TV crew and photographers -- about half the previous day's number.

As the UN prepared to hunker down for another night in Gleno, one senior official said to this departing journalist: "Please tell the world what is going on here."

"I'm quite lucky to be alive"

Jonathan Head --The militiamen simply appeared out of nowhere, and set upon us. We ran as fast as we could, and I sought shelter with my colleagues behind a building. I don't entirely recall what happened, though I gather colleagues of mine saw me being beaten. I think I'm quite lucky to be alive.

It was a very chaotic situation. While I was being beaten, there was Timorese man being beaten and hacked to death just across the road.

I think that tells you something about the way the militias are operating. Had they wanted to kill us, and they caught a number of other journalists, they would have done so. Instead, they took us over to the military post nearby.

They are clearly on good terms with the military, who were well armed, and stood by and did absolutely nothing while this mayhem was erupting around them. Later we were escorted out by the same man who had beaten us, who by that stage had calmed down. There was a lot that was orchestrated about today's mayhem, and a lot that was truly terrifying as well. When the police arrived, we had an extraordinary scene where they set up a line across the road.

They were very heavily armed, and could easily have dealt with these militias, who only have a few arms among them. The militias charged while there were journalists behind the line, and the police simply stood by and let them through.

We ran for our lives for a second time and I was astonished to see the UN civilian policemen running just as hard ahead of me. It is a symbol of a tragic impotence of this UN mission, which achieved so much when the Timorese cast their votes just two days ago.

It's not very clear what their objectives are. I sense that it's to create as much chaos as possible. The streets are now absolutely deserted. There are hundreds of local residents sheltering in the port, where they have taken all their possessions.

It's an extraordinary scene, a whole city decamping in fear of these armed gangs who were set up and trained by the Indonesian military. It's Indonesia that has allowed the situation to degenerate. Ultimately it appears they won't do anything about sorting it out. We've had too much evidence of that.

The question has to come back to the international community and the UN, as to how they will sort out security in East Timor, so that when the result comes through, the country can move forward hopefully to a better future.

As police stand and watch, militias rampage

Richard Lloyd Parry, Dili -- Even before the automatic rifles started firing late yesterday afternoon, the scene around the United Nations headquarters in the East Timorese capital, Dili, was close to anarchy.

Outside, on the curving road in front of the compound, a ragged battle was being fought with stones and homemade pipe-guns. A man had been hacked to death with machetes; journalists were scrambling over the walls to escape the pursuing militiamen.

Inside, behind the flimsy metal barrier, 300 women and children were huddling in fear, praying out loud and singing hymns, while UN officials and policemen milled in confusion. Then a new sound was heard, 100 yards away on the road leading past the UN compound -- the low rattle of an M-16 assault rifle, fired on automatic.

All week East Timor has been close to the edge, but yesterday's gun battle has pushed it over. Once again, armed militias have rampaged through Dili, this time at the symbolic centre of international authority in the territory. Once again, they have done so freely, under the eyes of the Indonesian security forces.

Last night the UN Security Council was expected to insist Jakarta do more to contain the violence, while the New Zealand Foreign Minister, Don McKinnon, raised the possibility of New Zealand and other countries sending in a non-UN peace-keeping force if the situation deteriorated.

HMS Glasgow is in the region, off Malaysia, awaiting a possible request to help with the evacuation of British and other international staff working for the UN Assistance Mission (Unamet).

Yesterday's violence began, as it always does here, with rumours. At the Hotel Turismo, where many of the foreign press contingent are staying, somebody had heard that there was shooting on the other side of town. Five-hundred yards from the offices of Unamet my canny driver urged us to go no farther. Ahead, figures could be seen darting and ducking -- a couple of dozen boys, throwing stones at a retreating pack of militiamen farther down the street.

A burning house was billowing black smoke; occasional pops could be heard from the homemade guns favoured by the militia -- treacherous blunderbusses consisting of a welded pipe packed with nails and gunpowder and set off with a cigarette lighter. The militia seemed to retreat and for a few moments the incident seemed to have sputtered out. Then events began to move very fast.

Far from backing off, the militia had cut through the houses and come up from behind, firing; in a moment, the stone-throwing boys were pelting away from them in all directions. I followed them through the garden of a house, across a jungly field.

A BBC crew found themselves cornered next to a pigsty by men armed with pipe-guns, who raised machetes over their heads; they were spared only when a senior militiaman called them off. With a group of colleagues clutching bags and cameras, I wheezed over the crumbly wall around the UN compound. Within was a remarkable scene of disarray.

The refugees, most of them women and little children, had scrambled over the wall 20 minutes before; at first, UN staff, not realising what was happening, had turned them back. They had been sheltering in the school next door after the militiamen burst into their nearby homes.

"They were wearing masks; they had their faces hidden in black, and they had red and white headscarves," said a young man named Fortunato Fausto Guterres. "They often come -- they steal food, rice, TVs, clothes, radios, motorbikes."

Now the frightened East Timorese were packing the hall where press conferences are usually held, on chairs, tables and on the floor.

A young woman at the front was leading prayers and hymns through the public-address system. UN security men, military liaison officers and members of the international civilian police force were peering past the lowered, and hopelessly feeble-looking front barrier. Some thirty journalists inside were exchanging stories of narrow escapes. Two cameramen had the window of their car smashed with a pipe-gun. An Australian magazine journalist hid in a pond after blunderbuss pellets whistled past his head. It was a wonder that there were not more casualties than the one certain death -- a Timorese man who was pursued and killed by the militia mob just yards from the sanctuary of the UN.

The film taken by a camera crew shows one of the militia hurling his pipe-gun at him. He falls, and is set on, and stabbed repeatedly by a gang of men with machetes.

At 5.30 the automatic gunfire began. The UN has among its staff several hundred army officers from all over the world and one of them was on hand to identify the sound: M-16s. "There are only two groups of people in Indonesia who carry M-16s," he said. "The Indonesian army, and the people that the Indonesian army give their guns to."

There can now be no doubt that the militias, set as they are on disrupting Monday's referendum on independence, do so with the active and passive co-operation of the Indonesian security forces. The killers yesterday were not numerous, a few dozen at most. Within yards of the Unamet headquarters are both a police station and an Indonesian army base, filled with members of one of the biggest and best-armed military forces in Asia.

But it was two hours before order was restored. From the time the first shot was fired it was more than three-quarters of an hour before the police came to the scene.

The most efficient job they accomplished all evening was ferrying journalists back to their hotels after the streets had calmed down. The same pattern has been seen for months all over East Timor -- militias who terrorise and kill, a military which arms and supports them, a police force which ignores them, and a government which promises to act but does nothing. And the greatest stupidity is that it is already too late.

A mile away from the UN compound, behind a substantial guard in Dili's museum, election staff were at work counting the votes cast in Monday's referendum. Almost 99 per cent of East Timorese turned out; no one doubts that they chose independence from Indonesia.

Late last night my brave East Timorese driver came to my room after driving round for hours looking for me; he was shaking as he spoke. "Why do they do this?" he said. "Because the fight is over. It is already done."

Five killed in East Timor rampage

Joanna Jolly and Agencies in Dili -- Anarchy returned to East Timor's capital yesterday with at least five people killed as hundreds of anti-independence militiamen targeted the United Nations. The violence came as the counting of votes from the autonomy referendum began.

Rampaging militiamen shot and hacked a teenager to death with machetes outside the UN compound in Dili -- the most brazen violence since the historic referendum on Monday.

A nurse at a Catholic clinic identified the man who died as Jorges Fransisco Bonaparte, 19. He was shot through the neck and had several deep cuts and bruises, and was pronounced dead at the clinic.

Dili's streets were deserted last night and up to 1,000 residents were sheltering in the UN compound.

Witnesses said at least five East Timorese were believed killed and many people -- including several foreign journalists -- wounded. They said the final death toll could be much higher. Fires were seen across Dili and the home of a UN translator was burned down.

Indonesian riot police sent in an hour after the violence erupted fired volleys of warning shots and dispersed the attackers. They claimed order had been restored and the offices of the UN Mission in East Timor were safe, but observers described Dili as "under militia control".

"We can't protect these people," said one UN staff member, referring to those seeking safety at the compound. "There will be a backlash against the UN now that our vulnerability has been exposed."

The UN Security Council last night began an emergency session to discuss the violence.

In a statement, UN Secretary General Kofi Annan called on Indonesian police "to arrest those responsible for the violence and to take immediate steps to ensure it does not happen again".

Indonesia's military commander in East Timor, Colonel Mohammad Muis, said his forces were on full alert. At least 75 riot police were reportedly fanning out to clear the area. Police in Jakarta said 360 officers from an elite unit would be flown in today.

The referendum is expected to favour independence from Indonesia for the territory, which was invaded in 1975, triggering years of guerilla warfare and human rights abuses in the former Portuguese colony.

The attack yesterday was the most serious on the UN since it took over organisation of the vote last May. One UN worker was killed on Monday and two were feared dead in attacks.

The fighting between militias armed with shotguns and independence supporters carrying knives and Molotov cocktails was initially not directed at the UN.

Members of the Aitarak militia then fired shots into a group of independence supporters and the shooting moved towards the compound. During the attack, an Indonesian military truck was seen to drive through the militia, then turn round and leave. A group of Indonesian police was also seen driving near the fighting without intervening.

UN staff radioed the police, who said their arrival was delayed because they did not know the way to the compound, used by the UN since June.

Police watch as militia take over airport

Hamish McDonald -- In Dili's airport, members of the Aitarak militia stand in the departure lounge, preventing Timorese and Indonesian families boarding the Merpati Airlines jet to fly to Denpasar and safety. Airport police just watch.

In the coffee-growing highlands around Ermera, militias fire home-made guns at a United Nations helicopter trying to take out ballot boxes for counting. A militia member points an M-16 assault rifle at an unarmed UN policeman. A drunken army sergeant blocks a UN evacuation convoy with his vehicle. Indonesian police stand by.

In one of the most prominent military buildings in Dili, the old Portuguese army intendencia, or guardhouse, militia members lounge around the entrance in their gang T-shirts. Out in the suburbs, they wave and fire their guns openly. A prisoner breaks free from a militia camp and seeks shelter in an army barracks. The soldiers let the militias in to take the man out.

So soon after Sunday's UN-brokered agreement between the militias and Falintil independence fighters to canton their forces and withdraw arms from the streets -- a deal that brought a vital day of relative freedom over most of East Timor for Monday's successful plebiscite -- the will to enforce security seems once again to be slipping fast among Indonesian forces.

At the same time, Indonesia's claims to East Timor are almost palpably weakened, following the 98.6 per cent turnout that signifies a massive rebuff to militia attempts to scare away voters. As the 432,000 votes are counted in Dili's museum over the next three days, Jakarta's authority will weaken further, even before the result is announced next Monday or Tuesday by the UN Secretary-General, Mr Kofi Annan. A transition of power is already under way, and the security mechanisms around it look close to falling apart.

Many townsfolk in Dili have taken to the hills, sheltering with friends, to avoid the next dangerous days.

Maliana, the strife-torn town on the western border, is again described as a "ghost town" by a UN official, after its citizens came back to vote on Monday. The fear is another desperate militia rampage. The 4,000 local staff of the UN mission, being singled out by pro-Indonesian leaders for "telling" people how to vote, are at particular risk. The ultimate strike at democracy, of course, would be an attempt to destroy the counting centre here before the votes are tallied.

Some senior defence analysts believe the Indonesian military, TNI, has come reluctantly to accept the likelihood of East Timor leaving.

A crucial turning point was a Cabinet meeting on July 28 when Defence Minister and TNI commander, General Wiranto, argued passionately for the whole exercise to be called off, on the grounds it was tearing Indonesia apart. After eight hours debate, the civilians in Cabinet prevailed.

But that does not necessarily translate to wholehearted co- operation. Indeed, the flurry of security precautions last week only came after maximum behind-the-scenes diplomatic pressure, including a tweak on the IMF funding strings.

We could still see all the ugliness of a resentful retreat: dumped local militias taking out their defeat on perceived enemies before making their own escape; holdouts trying to hang on to patches of territory in the west; the TNI itself under attack once more as it tries to pack up.

Extra UN military liaison officers began arriving in Dili yesterday, from Australia and Pakistan. Within weeks, the liaison staff will grow from 50 in the pre-ballot phase to 300, while the civilian police component will almost double from 274 officers. But these are all unarmed, with no direct powers beyond advising Indonesian police and soldiers, who have direct security responsibility.

Even on Tuesday night, the Foreign Minister, Mr Downer was arguing on the 7.30 Report that the only alternative to this arrangement was an "invasion" of Indonesian territory to insert the international peacekeeping force which many observers here believe even more necessary than before.

This is disingenuous and no-one, especially not Opposition foreign affairs spokesman, Mr Laurie Brereton, is arguing for it. If the military analysts are right in thinking the TNI will accept the outcome, once a pro-independence vote is declared, it could be persuaded on an early, gradual transfer of power to a UN force that would be here within months.

Australia ruled out yesterday the possibility of Australia participating in any non-United Nations military force in East Timor.

The Minister for Defence, Mr Moore, said Australia was prepared to meet any need for evacuation from East Timor, but added: "Troops from Australia will not go in unless it's at the invitation of the United Nations with the sanction of Indonesia."

But New Zealand's Foreign Affairs Minister, Mr Don McKinnon, said non-UN intervention in East Timor was possible if violence escalated in the troubled territory.

"The worst that could happen is absolute chaos by the end of the week," Mr McKinnon said, adding that the chances of getting a UN mandate for intervention were very low.

He said a group of "like-minded" countries could decide to intervene if the situation deteriorated. "We can't go on hearing about this bloodshed the way it is now and not engage in some sort of a support base," he said, listing Australia, New Zealand, Japan, the United States and possibly members of the Association of South East Asian Nations (ASEAN) as potential participants.

A spokesman for the Minister for Foreign Affairs, Mr Downer, said last night that he had been surprised by Mr McKinnon's reported comments and had sought clarification.

"Mr McKinnon's office re-assured us that non-UN intervention in East Timor is not an option that is being promulgated by New Zealand because of the self-evident complications associated with it," he said. "For those who have still not got the message, Australia will not be invading Indonesia."

Australia has consistently said armed involvement of its military could only happen with Indonesian Government agreement. Unlike Australia, New Zealand never formally recognised Indonesia's incorporation of East Timor after the 1975 invasion and there have been tensions between Canberra and Wellington on the policy divergence.

ASEAN, which also recognised Indonesian sovereignty over East Timor, would not intervene in East Timor without Jakarta's approval.

Mr Moore will fly to Tindall RAAF base in the Northern Territory this evening to be briefed and to speak to troops involved. He said he saw no reason why normal military exercises with the Indonesian military should not continue, because theywere in Australia's interests.

Labor's foreign affairs spokesman, Mr Laurie Brereton, said the international community, led by the UN, should intervene if Monday's vote went in favour of independence.

The Australian delegation to East Timor had to delay its departure from Dili yesterday because of road blocks erected by pro-Indonesian militias.

Thousands flee in fear of bloodshed

Mark Dodd, Dili -- Thousands of Jakarta supporters in East Timor have packed their belongings, locked their homes and fled across the border into Indonesian West Timor in fear of renewed bloodshed following Monday's ballot.

A United Nations Civilian Police officer based at the East Timor border town of Batugade told the Herald that between 30 and 40 buses loaded with belongings from Indonesian families or supporters of integration were crossing each day.

Dili-based human rights groups and senior UN security officials said the exodus comprised mainly family members of Indonesian military, police and militia officials, but also included civil servants and small-business people.

A Herald news team visiting the violence-riven Western district of Maliana, 140 kilometres from Dili, on Monday saw a steady stream of traffic heading for the border.

A senior UN political officer based in Maliana said the local bupati (mayor) had estimated some 4,000 people -- one third of the entire population of Maliana sub-district -- had left since August 15.

"This exodus really started on August 15 following the start of the pro-autonomy campaign," said the official, who asked not to be named.

Around Atabae, Batugade and Balibo in the south-west hills, hundreds of households were preparing for immediate evacuation.

Family members were seen sitting outside their homes with bed- rolls packed and bags of provisions nearby. Mini-buses and vans were doing a roaring trade as they collected the emigres for the short trip across the border.

Many houses in Maliana and nearby Balibo were deserted because their pro-independence owners had fled into the hills to safety rather than cross the border into West Timor.

Many residents spoke of threats by pro-Jakarta militia to launch attacks if the referendum vote went against them -- an almost certain outcome.

Dili was tense last night after scores of Aitarak militia wearing black T-shirts ransacked the ocean-front office of the pro- independence National Council for Timorese Resistance (CNRT), which opened only one week ago.

Aitarak, a Tetum language word for Thorn, is one of the biggest and best organised pro-Indonesian militias, led by Eurico Guterres, whose main source of income is derived from lucrative gambling rackets run out of the municipal market.

Police were nowhere to be seen while many Aitarak had apparent freedom of movement in and out of the local ocean-front military barracks one kilometre away.

The funeral of an autonomy supporter scheduled for today has raised fears of renewed militia violence. Last Thursday at least five people were killed when militia went on a rampage. Many shops in Dili remain closed. Their owners have either fled into the mountains or joined the border exodus.

Local staff from the UN refugee agency (UNHCR) fled late last week after militia threats to torch the office. Hundreds of locally employed household staff who live in the staunch pro- independence neighbourhoods of Becora and Kulunun have also fled into the hills. "We're expecting trouble before the end of the week," said one senior UN security official based in Dili.

Indonesia deports four Australian TV crew

Dili -- Indonesian authorities on Tuesday deported four Australian journalists from East Timor, accusing them of inciting violence during the territory's autonomy ballot, a military official said.

The high-ranking official told AFP the four members of a TV crew were arrested at a polling station in Maumete, Liquisa district, scene of a brutal massacre of refugees by pro-Indonesian militiamen in April.

They were asking voters how they had cast their ballots in Monday's historic self-determination vote, he said. "It's true that there are four Australians going to be sent away from here," the official said requesting anonymity.

Police arrested the four, travelling on tourist visas, after they had upset voters in the polling station by interviewing them and allegedly influencing some to vote against Jakarta's autonomy proposal, officials said.

"A voter didn't like the fact they were asking questions and had even told some of the other voters to choose the pro-independence option. So, they'd created trouble there for themselves," said the military official.

"They were taken in by local police and later handed over to the Dili police. The police found out that they in fact only had tourist visas while doing reporting work. That's illegal," he added.

Australian Foreign Minister Alexander Downer said in Sydney a five-person crew, from the Nine Network's Sixty Minutes programme, had been detained at the police station where they sought shelter after being chased by pro-Indonesian militiamen.

Downer told reporters the crew had behaved in an "extremely provocative" manner. The military official said the four were arrested "for their own good."

Downer said the four crew had arrived with visitors' visas and without the necessary working visas or UN accreditation required by Indonesia. "Thirdly, they went to Liquisa, one of the more sensitive towns in East Timor, and they decided that it would advance the story they were producing if they were to interview people and ask them how they had voted or how they were going to vote," said Downer.

"The UN with the support of countries like Australia and the United States and others has worked long and hard to do everything we could to ensure this was a secret ballot.

"Even to ask people to expose publicly how they had voted would be seen, if I could put it diplomatically, by many people in East Timor and even elsewhere as extremely provocative."

The military official identified the four as Paul Ewan Boocock, 43, Mark John Llewe, 38, David Michael Norton Smith, 53, and Richard George Carleton, 56. He said they were being deported from Dili airport via Bali.

Sixty Minutes reporter Carleton accused pro-Jakarta militiamen of punching a woman working with his crew. "I was talking to people in the voting line and one of the militia came over and he sought to intimidate them," Carleton said here.

"I remonstrated with him, I asked him not to. I asked him why he was doing it and the crowd laughed at him and I think that's probably what caused the greatest offence.

"After that, a group of the militias became very angry and violent. They attempted to punch us and kick us -- they punched one of the women that was working with us."

Timor ballot part of anti-Indonesia plot

Jakarta -- Indonesia's leading pro-Moslem newspaper on Tuesday called the UN-run independence ballot in East Timor a conspiracy to undermine the world's most populous Moslem nation.

The Republika, controlled by a Moslem intellectuals' group founded by President Habibie, said in an editorial the UN mission in East Timor (UNAMET) had discriminated against migrants and Moslems during Monday's voting in the mainly Roman Catholic territory.

"UNAMET's decision to ask eligible voters to produce their christening papers ... can be seen as an effort to block [Moslems] and migrants from taking part in the ballot," it said.

Most of the migrants in East Timor are Moslems coming from the Indonesian islands of Java and Sulawesi. The United Nations allowed voters to produce a variety of identification papers before they cast their ballot, including birth certificates and Indonesian government ID cards. The United Nations estimated that over 95 percent of registered voters had turned out for the poll, which is widely expected to put East Timor on the path to independence.

Republika said it had collected reports that UN staff -- accused this week by State Secretary Muladi of pro-independence bias -- had forced people to vote for independence.

The editorial said Australia and the United States, which had threatened to cut aid if Jakarta failed to keep order during the ballot, had their own interests in the territory. "Apart from the ideological factor, East Timor which links the Pacific and Indian Oceans is very strategic for warships and commercial vessels," it said.

"The United States of course do not want to miss the opportunity ... to monitor the Asia Pacific. While for Australia, East Timor can be used as a buffer zone to contain disturbances from the north," it said.

"We hope that during the ballot, the East Timorese will choose Indonesia," it said. "But if East Timorese choose to separate from Indonesia, please be a good and friendly neighbour. Be free in its real meaning ... don't be a `puppet' of foreign interests."

Indonesia invaded the former Portuguese colony in 1975 and annexed it in 1976 in a move not recognised by the United Nations.

People power keeps militias at bay

Despite fears of militia intimidation, the people of East Timor turned out in their thousands to vote yesterday on independence. David Shanks reports from Maliana.

In one of East Timor's most populous and strategic border areas, people power yesterday seemed to blow away the militias.

Charging through the night to catch the opening of the polls in Maliana at 6.30am, we found them walking the road in their Sunday best. Young, craggy or crippled, many had been on the move for 10 hours and more.

Five thousand people registered by August 6th in Maliana and 3,000 of them were already outside the polling centre in the local hall. Before long all 5,000 seemed to be there. But the pecking order was that the local bupati (mayor) got to cast his vote first, and then the local military who had Timorese family connections.

Many had been there for hours clutching their laminated UN registration cards and ID. They were in great form, waving and smiling at the international community that came to help them express themselves. One little old man shook hands and kissed my hand.

About 30 people have been murdered in Maliana -- a quarter of them in the last week of campaigning for a "popular consultation" that now looks likely to say the people want independence. And in the past two weeks about 2,000 have fled militia intimidation. As recently as Saturday, Maliana had been known as a hotspot.

But the people had clearly nursed all their courage for this day. An Australian civilian policeman (civpol) told how on Saturday he was pinned down by militia with automatic weapons and rifles and it took the police 45 minutes to get there. "We thought we were goners." But yesterday at least the militia made themselves scarce.

Mr Filipe Soares (27) said he would vote for independence and so would everyone else there. Asked about the militia he said: "Maybe they will attack later. "A woman with a baby said: "The police have not been neutral here. They were for autonomy but I am for the second option" on the ballot, independence.

During a 12-hour tour of six remote polling centres starting from Dili at 3am it was much the same story.

As the sun rose in an azure sky on the highlands and brown, fragile-looking wooden shacks with thatch or corrugated iron roofs, cocks crew and bantam pigs darted about in the ditches.

At Balibo, however, there was tension because Indonesian police (the Polri) had been agressively checking IDs, which was "not their responsibility", a UNAMET (UN Mission to East Timor) official complained with some agitation.

"They were being rough, unpleasant and intimidating." Their mandate was to provide security. People "who looked suspiciously like militia" had also come in brand new cars and checked IDs and taken video and still shots of the queue.

Their leaders were still around, watching from the verandah of a wooden house across from the polling centre. Last Friday there had been an armed militia roadblock a few paces from the centre.

Down the road in another brown wooden building, militia paymasters doling out money to young men in another queue were surprised when a journalist drifted in. The money was quickly put away.

At Odomao Atas, Ms Jean Feilmoser from San Francisco was the "team leader", not the boss. Some 1,800 registered voters had all but voted and she was "esctatic". But she was particularly pleased that 590 Falintil "hill families", who had been under threat from militias, had been able to vote because civpol and Indonesian police had guarded them for two days and escorted them to the polling centre. Ninety-five per cent of them were illiterate but they could understand the ballot paper and how to vote, she said.

The families had made a ceremonial gift to herself and her fellow team leader: a bag of eggs each, a bunch of bananas, and two chickens. So they had named them "Autonomia" and "Independencia". A journalist asked her which they ate first.

Two of her Timorese team had not turned up today. She was worried about the safety of the Timorese who worked for UNAMET -- "especially afterwards". Mr Laurie Brereton, the Australian Labor Shadow Foreign Minister, was doing the rounds as an observer.

"The voting performance must be one of the great successes of modern democracy." The indomitable will of the people was "nothing short of profound". But he too worried about the aftermath and said there was a challenge for the world community to see that the process was completed. He called for UN peacekeepers.

Outside the polling centre at Anibal Paulo da Oriveira Maya, a National Council of Timorese Resistance (CNRT) "co-ordinator" -- wearing a camouflage tunic -- explained that everyone there had complete faith in the process and they were voting for independence.

Down the road a group of cheerful Polri posed for a picture and one told me the make of his rifle, a Lugar mini.

At Batugade, West Timorese with dodgy papers, who were supposedly trucked over by militias, turned out not to be the problem that had been anticipated. But a watch was being kept on the queue by Mr Jorge Tavares da Silva, a leader of the Hali Linta and Daduras Mera Puthi militias. UNAMET reported no problems from militias.

Asked if the turnout meant that there would be no more violence, Mr Tavares da Silva's taciturn reply was that there would be "no problems". His lips quivered as the question was asked.

Timor: `We are terrified here'

Lindsay Murdoch -- Pro-integration forces blockaded Dili airport and set up roadblocks around the East Timorese capital late yesterday amid unconfirmed reports that militia had killed two more United Nations staff.

A pro-Jakarta leader earlier walked out of a conciliation conference hosted by the United Nations, saying he would challenge the results of Monday's ballot on the future of East Timor because of alleged polling irregularities.

UN officials said the town of Ermera, south-west of Dili, had been under siege for several hours late yesterday after a convoy of 17 vehicles carrying about 150 people, including up to 20 Australians, was threatened and blocked from leaving for Dili.

An Australian aid worker in the convoy, Mr Jeremy Hobbs of Oxfam International, said the militia were demanding that 50 Timorese in the convoy be handed over to them.

"We are terrified and in strife here," he said by satellite telephone before the convoy was allowed to proceed.

Another locally employed UN staffer, Mr Joao Lopes Gomes, 49, was stabbed to death by militia in the same district on Monday night, prompting outrage from the UN.

The violence came as militia opposing independence went ahead with a threat to stop East Timorese political leaders from leaving the disputed territory.

Witnesses said Indonesian police failed to act as five East Timorese were prevented from boarding a flight to Bali.

A militia leader, Mr Eurico Guterres, said his men would stop all of East Timor's elite from leaving until further notice. "We don't want any of the leaders of either side to go," he said. "They have to be responsible to the people ... they cannot run to Australia or go and eat steaks at five-star hotels in Jakarta or Bali."

A day after almost all 438,000 eligible people -- 98.6 percent of those registered -- voted in an atmosphere free of violence, armed militias returned to the streets of Dili, harassing people, ransacking the office of independence supporters and forcing most residents to stay indoors.

While UN officials hailed the ballot as a success, a key pro- Indonesian leader, Mr Basilio Araujo, described it as "garbage" and warned it would sow the seeds for new conflict.

Mr Araujo released a seven-page, 55-point list of alleged irregularities. These included UN staff encouraging people to vote for independence, polling booths made of cheap materials, more ballot papers having been issued than there were voters and votes cast exceeding the number of registered voters.

The statement said that the UN mission was part of an "international conspiracy to block and defeat the integration stream" because that was what the "big countries, the colonisers and killers of mankind for centuries desire".

Mr Araujo walked out of aUN-organised meeting in Dili after saying his side would not co-operate until the UN properly investigated the complaints.

In Jakarta, Indonesian ministers gave conflicting signals on whether the Government of President B.J. Habibie would accept the result.

The Foreign Minister, Mr Ali Alatas, welcomed a "peaceful and therefore fair execution" of the ballot, saying he was confident irregularities would be investigated.

But only hours earlier the Justice Minister, Mr Muladi, accused the UN of an independence bias and said the vote should be held again if there had been intimidation by UN staff.

Asked about reports that UN staff pressured people to vote for independence, Mr Muladi was quoted by the official Antara newsagency as saying: "This is proof that UNAMET [the UN mission] consists of pro-independence people." But Mr David Wimhurst, the UN's spokesman in Dili, rejected claims that UN staff influenced people to favour independence. "All our staff involved in this process acted correctly and assisted those who required such assistance. I suspect the unfounded allegations are a result of a misconception and a misunderstanding."

The Australian observer delegation, led by the former deputy prime minister Mr Tim Fischer, said from what it had seen "procedures allowed for a vote that was secret, free and fair".

Mr Fischer said he had been told three UN local staff had been killed in the Ermera area. But UN officials in Dili said they could not confirm reports of the additional two killings.

Another delegation member, Mr Pat Walsh, of the Council for Overseas Aid, said the East Timorese "were game enough to defy the system and come out against all odds and vote for independence". They "would have walked over broken glass" to vote and "full marks to them".
 

Presidential succession

Parliamentary seats allocation agreed

Jakarta -- The Indonesian Elections Committee (PPI) on Wednesday finally agreed seat allocations for the national parliament elected on June 7.

After weeks of controversy over seat distribution, only 21 of the 48 parties which contested the country's first free general election for more than three decades will sit in the House of Representatives (DPR). Jacob Tobing, who chairs the PPI, said the seat distribution was now final.

Under the final allocation, the Indonesian Democratic Party/Struggle of opposition leader Megawati Sukarnoputri secured 153 seats and the ruling Golkar party trailed second with 120 seats.

The Moslem United Development Party won 58 seats, the National Awakening Party 51, and the People's Mandate Party of reformist figurehead Amien Rais 34. The 120 remaining seats were shared by 16 minor parties.

Tobing said the 120 seats had been the stumbling block to agreement. They were finally handed out on a rank system, and not according to vote sharing deals entered by several parties prior to the elections.

Eight Moslem parties have said they could take KPU to the court for annuling their vote sharing agreement.

Besides the 462 elected seats, the DPR also comprises another 38 seats allocated to the military who do not vote in polls.

The DPR members will join another 200 appointees representing the provinces and interest groups to form the The People's Consultative Assembly (MPR), the nation's highest legislative body.

The MPR will convene in October and select a new president in November. Incumbent President B.J. Habibie, of Golkar, and Megawati are the main frontrunners for the presidency.
 

Political/economic crisis

Three killed, 14 wounded in Ambon

Jakarta -- At least three people were killed and 14 others wounded Friday when Indonesian security forces opened fire to quell a new outbreak of Moslem-Christian in the strife-torn Ambon city, a report said.

Two bodies from the violence in the Tantui area in the eastern outskirt of Ambon, were brought to a navy hospital and another to the Moslem Al Fatah hospital near the city's main mosque, the Antara news agency said. Antara quoted a police officer in Ambon as saying that security forces now had the situation under control.

Earlier Friday a military spokesman in Ambon said only one man had been killed and a policeman was injured in the clashes in Tantui. "Information from the field said one Moslem died, one policeman was injured in clashes in Tantui area," Lieutenant Colonel Iwa Budiman, the spokesman at the Maluku military command told AFP from Ambon. Budiman said the attack was likely to have been initiated by Moslems, adding that Christians had shown restraint.

Tantui is a mixed neighbourhood near the predominantly Moslem Batumerah area. "I suspect this incident was not provoked by the Christian side here," he said. But Budiman said he did not how the man had died.

The Media Indonesia daily said Friday one man was killed and four others wounded by gunshots in Tantui in the previous day when security forces opened fire to fend off a warring mobs.

The military spokesman said renewed Moslem-Christian violence since late July has killed 135 people and injured 389 others. The violence has also left hundreds of houses gutted.

More than 400 people have been killed in Ambon and other Maluku islands in Moslem-Christian unrest since the start of the year. Tens of thousands of people have fled to other provinces and there has been widespread destruction. The communal violence resurfaced in late July after a lull of a few months.

Fresh violence in Ambon kills eight

Ambon -- Fresh outbreaks of violence between Moslems and Christian Wednesday killed eight people and injured six others in two separate islands in the riot-torn Maluku province, police said.

Four people, two Moslems and two Christians, were killed and two seriously injured in clashes near the airport in the city of Ambon early Wednesday, Ambon police chief Lieutenant Colonel Ghufron told journalists.

The clash involved residents from the predominantly Moslem Laha and Tawiri areas across the bay from Ambon. Ghufron said the victims were killed and injured by machetes, arrows and home-made bombs.

He said four people were also killed in communal clashes in neighboring Saparua island, but he gave no details. But a priest in Ambon said the violence in Saparua island, in central Maluku, claimed three lives.

They were shot dead by troops trying to quell the clashes between residents of predominantly Christian Hulaliu village and Moslems from Portoharia village.

"Two Christians from Hulaliu were shot dead and another death is from Portoharia," Patinaya, a priest at the Maranatha Protestant church told AFP by phone. The troops also injured three others, he said. Patinaya said the clash in Saparua also involved villagers from neighboring Haruku island.

More than 400 people have been killed in Ambon and other Maluku islands in Moslem-Christian unrest since the start of the year. Tens of thousands of people have fled to other provinces and there has been widespread destruction. The communal violence resurfaced in late July after a lull of a few months.
 

Aceh/West Papua

Indonesian youth demand referendum

Banda Aceh -- Inspired by East Timor's independence referendum, students occupied a government building Monday, demanding a similar vote in the violence-torn Indonesian province of Aceh.

President B.J. Habibie, however, repeated that he would not allow a referendum in Aceh where hundreds have been killed this year in fighting between the military and separatists.

Opposition leader Amien Rais said Habibie told a meeting of political party leaders Monday: "There will be no referendum there this year, in the next five years or even next ten years." Officials here have expressed fears that Monday's referendum in East Timor could encourage rebels elsewhere in this far-flung archipelago, where at least three areas have separatist movements.

In Aceh, around 500 university students seized the lobby of the provincial parliament building for about two hours Monday, carrying banners saying "Get the armed forces out of Aceh" and "Referendum, yes." More than 50 riot police stood nearby, but did not take any action. The pro-independence students eventually left the lobby for a march through the provincial capital of Banda Aceh.

Aceh, at the northwestern tip of the country about 1,100 miles from Jakarta, is rich in oil and natural gas deposits. Besides it and East Timor, the region of Irian Jaya also has seen separatist violence.

Call to extend free vote to Aceh, Papua

Craig Skehan -- Jostled by a media frenzy and a crowd of supporters, Mr Xanana Gusmao, the nationalist fighter almost certain to lead an independent East Timor, received a hero's welcome as he voted here yesterday.

The 53-year-old -- imprisoned in 1992 for his guerilla action, but transferred to house arrest earlier this year -- is expected to be freed in about a fortnight.

"Today the East Timorese people exercised their fundamental right to self-determination," he said as he cast his vote at a United Nations-supervised polling centre in the Indonesian capital. "Let us free our homeland, our beloved East Timor."

Further bloodshed would be intolerable, he said, calling on all youth supporting independence not to provoke violence or respond to nny provocations. "Reconciliation must be genuine and entered into with sincerity," he said.

In contrast to the cautious, conciliatory approach taken by Mr Gusmao, his fellow activist, Mr Manuel Carrascalao, said a free East Timor would support independence movements in the Indonesian provinces of West Papua and Aceh.

"It is not just Aceh and West Papua we will support but all parts of Indonesia that have suffered," he said outside the polling station set up for absentee East Timorese voters.

Mr Carrascalao is a member of the education and socialisation committee of Mr Gusmao's National Council for Timorese Resistance (CNRT), but the organisation has never formally spelt out its post-independence political position.

Any assistance for other independence movements could complicate delicate relations between East Timorese leaders and Jakarta during negotiations after an expected pro-independence vote. Mr Carrascalao, whose son was killed in an attack by anti- independence militia earlier this year, said all peoples were entitled to self-determination.

Among other voters in Jakarta was a 70-year-old honey merchant, in the city for a provincial produce exhibition. Boasting that his East Timorese honey was the best in Indonesia, Mr Salen Sagran said he had remained neutral on his country's future and would accept whichever option the majority chose.

But East Timor would have little choice other than to co-operate with Indonesia because of its geographical position, he said. "We have things Indonesians want, especially our honey and our coffee."

Thousands protest in Aceh

Jakarta -- Police fired warning shots to stop a convoy of 2,000 people heading for a rally in Indonesia's troubled Aceh province, press reports said Friday.

The crowd lay down on the road linking Banda Aceh, the capital of Aceh, and Medan in the neighbouring province of North Sumatra, after police forced their convoy of vehicles to halt around 18 kilometres east of the district capital Sigli on Thursday, the Jakarta Post said.

Police fired shots in the air when the vehicles refused to stop, and the people were then forced to leave the vehicles, the paper said. The crowds then spread out in the road in protest.

"We only plan to attend a meeting, nothing else ... the police didn't have to fire shots ... many panicked," one of the participants said.

They had planned to attend a mass rally at the Darussalam University in Banda Aceh to call for a self-determination referendum for Aceh.

"Such behavior, threatening people suspected of being rebels shows that there is no good intention on the part of the government to bring a peaceful settlement to problems in Aceh," another protester said.

Pidie police chief Lieutenant Colonel Endang E. Bagus said: "The measure was taken to prevent any harm against the residents since night travelling could have been dangerous."

The convoy grew to around 32 trucks and buses as it made its way from Ulim near the eastern border with North Aceh.

Meanwhile, the state Antara news agency reported that 73 refugees from Pidie, East Aceh and North Aceh -- three districts that have borne the brunt of harsh military operations against separatist Islamic rebels -- have died. Most of the refugees died from diarrhea, fever and other old age-related illnesses, said Ibrahim Hasyim of the Aceh health ministry staff.

Around 45,000 refugees from the three districts are still sheltering in camps in the province after soldiers shot dead 41 civilians during a May protest in Lhokseumawe, North Aceh.
 

News & issues

Recovery at threat from pulp-fiction tale

Jakarta -- It is a murky tale which strikes deep at the even murkier heart of Indonesian banking, and heavyweights of international finance warn it could spell ruin for Southeast Asia's shakiest economy.

Ever since it emerged last month that Bank Bali had paid a dubious "commission" of 546 billion rupiah (80 million dollars) to the company of a high-ranking member of the ruling Golkar party, the case has depressed the Jakarta stock market amid allegations of bribery, incriminating diaries and even kidnapping.

This is no ordinary financial scam lightly dismissed in a country where corruption revelations are depressingly frequent.

Newspapers have gleefully followed the case as it has evolved to implicate officials in charge of bank restructuring and even lapped at the doors of the presidential palace.

Executives at the International Monetary Fund and the World Bank, two bodies whose loans are saving Indonesia from financial collapse, are growing irritable at the snail's pace at which the scandal is being investigated.

They warn that by eroding the fragile credibility of Indonesia's financial reform drive it is too serious to go the way of other investigations, such as one into the alleged ill-gotten fortune of former president Suharto which has dragged on for more than a year.

"This scandal has to be cleared up as quickly as possible ... it shouldn't take weeks and weeks, it should take maybe two or three [weeks]," says the IMF's Asia-Pacific director, Hubert Neiss.

In an interview on state television broadcast Saturday, he echoed calls for an open investigation made this week by World Bank country director Mark Baird.

More rigorous transaction controls must be introduced at the Indonesian Bank Restructuring Agency (IBRA), three of whose officials are under police investigation, "as well as in [the central] Bank Indonesia to make a recurrence of such a problem much less likely," Neiss said.

Bank Bali's disgraced former president Rudy Ramli paid the "commission" to a company run by Setya Novanto, who resigned last week as Golkar's deputy treasurer, to ensure it retrieved loans worth some 133 million dollars from three crippled banks which IBRA had shut down.

The huge sweetener was supposedly unnecessary as the state has guaranteed outstanding loans owed by banks being forcibly closed in IBRA's shake-up.

Megawati Sukarnoputri's opposition Indonesian Democracy Party- Struggle (PDIP) alleges it was told by Ramli that he was under pressure to hand over the money to partly bankroll President B.J. Habibie's re-election bid. Habibie and Golkar deny involvement.

Ramli is also meant to have told PDIP investigators that he has written a secret diary containing an explosive blow-by-blow account of the whole deal which could leave a lot of red faces in the corridors of power.

Ramli, however, says he was abducted by a PDIP official and, under pressure to satisfy the party's belief of high-level involvement in the scam, gave a fictitious account which included making up the diary's existence.

Not so, decry angry PDIP lawyers who on Friday filed a police complaint against Ramli and branded him "a big liar."

Novanto has returned the commission to an escrow account, and while some of the case's details may read more like a cheap crime novel than a serious bank fraud, the IMF and World Bank are taking it very seriously.

"I believe, if there was no early and satisfactory resolution, it would be very difficult for us to provide budgetary support to the government of Indonesia," Baird said.

International accountancy firm PricewaterhouseCoopers has been commissioned to audit Bank Bali and, in an unprecedented step, the government has also invited it to examine Bank Indonesia's books.

Bank Indonesia deputy governor Subarjo Joyosumarto acknowledged Saturday that authorities were under pressure to safeguard the country's standing in the eyes of foreign investors.

"It is true that the way in which the Bank Bali case is settled will be a test of whether we are credible enough in resolving such cases," he said.

"And credibility will help restore the economy, so the IMF and the World Bank is naturally interested in having the economic recovery proceed."

A senior official at the National Development Planning Board, Budhy Tjahjati, warned the government to take the IMF and World Bank concerns seriously.

There is "no doubt that multilateral institutions would stop financial support to Indonesia if the resolution to the scandal [is] far from expectation," she was quoted as saying by Saturday's Jakarta Post.

Group slams IMF, World Bank over scam

Jakarta -- An Indonesian group Tuesday slammed world bodies including the International Monetary Fund (IMF) for failing to sound the alarm over an 80-million-dollar bank scam, despite closely monitoring the Indonesian economy.

The IMF, World Bank and the Manila-based Asia Development Bank "must bear some of the responsibility for the Bank Bali scandal," said the International NGO (non-governmental organisation) Forum on Indonesian Development.

The scandal revolves around Bank Bali's payment of 80 million dollars as a "commission" to a company owned by the then deputy treasurer of the ruling Golkar party.

The massive sweetener was designed to ensure the recovery of loans owed to Bank Bali by three banks closed down by the government. Golkar has denied it was used to party bankroll President B.J. Habibie's re-election bid.

"This scandal occured during the bank's recapitalization [programme] which is part of the IMF bailout package," the NGO group said in a letter to executives of the three bodies, whose loans are saving Indonesia from financial collapse. "Clearly, the WB, IMF and ADB have failed to properly supervise the use of the loan."

The IMF and other donors gave a 44-billion-dollar aid package to salvage Indonesia's battered economy in December 1997, a large portion of which goes towards funding a costly banking recapitalization programme.

The NGO organization demanded the three bodies immediately delay or halt further aid disbursements until a new Indonesian government is formed following June's parliamentary election.

Bank Bali's disgraced former president Rudi Ramly has claimed the "commission" was necessary as he had spent a fruitless nine months trying to retrieve the loans, worth some 133 million dollars, from the Indonesian Banking Restructuring Agency (IBRA).

Three officials at IBRA, which was set up under the IMF-led bailout programme, are under police investigation over their alleged involvement.

The World Bank's deputy Asia-Pacific president, Jean-Michel Severino, and resident country representative Mark Baird said Saturday they had only learned of Bank Bali's problems with the IBRA on July 31.

Baird warned last week the World Bank might suspend its support for the Indonesian economy unless the Bank Bali case was resolved rapidly.

The IMF's Asia-Pacific director, Hubert Neiss, said on Saturday: "This scandal has to be cleared up as quickly as possible ... it shouldn't take weeks and weeks, it should take maybe two or three [weeks]."

And Shoji Nishimoto, the Asian Development Bank's director of programmes, said the scandal was "very disappointing," echoing calls by Baird and Neiss for a thorough inquiry.

"It affects all of us because the IMF, the World Bank and the ADB have been supporting the difficulties of the [Indonesian] government," he told CNN Monday.

But the NGO forum accused the three multilateral bodies of failing to live up to their rhetoric on the case. "Baird even said that his earlier threat was only meant to push the government to resolve the case swiftly and satisfactorily," Binny Buchori, one of the NGO forum's leaders, was quoted as saying by Monday's Jakarta Post.

Britain defends right to visit arms fair

London -- The British government was forced Tuesday to defend a decision to invite Indonesia to Britain's biggest arms fair, after it emerged that British-made jets were used to intimidate people in East Timor.

Defence Procurement Minister Baroness Symons defended the invitation to next month's fair, saying it was a recognition of Indonesia's right to defend itself, as guaranteed by the United Nations Charter.

Symons reiterated British Foreign Secretary Robin Cook's insistence on Monday the Indonesian government had given "absolutely specific assurances" that British-made Hawk jets would not be used for internal repression again.

Indonesia was now a country "in transition" since it held democratic elections earlier in the year following the deposition of former dictator President Suharto, Symons said. "It is an emerging democracy and has the right for self-defence," she told BBC radio.

Reports emerged Monday that the jets made by British Aerospace had twice been used to intimidate separatist islanders in East Timor, which has just held a referendum on independence.
 

Environment/Health

Hot spots multiply in Indonesian forests

Jakarta -- Indonesian forest and ground fires in Sumatra and Borneo island are on the rise again after dissipating in recent rains, satellite images produced by the Indonesia Space Agency showed Friday.

Satellite images dated September 1 showed 43 hotspots in the region of Sumatra and 16 in Kalimantan, the Indonesian part of Borneo island shared with Malaysia and Brunei, said the agency's Muslich Musa Wijaya.

Rain in recent weeks has kept the number of hotspots in the two regions down to between 10 and 20, he said. The hotspots in Sumatra were detected in Riau, South Sumatra and Lampung provinces. In Borneo, the hotspots were mainly detected in West and Central Kalimantan with two in South Kalimantan.

The fires, blamed on farmers and plantation owners clearing their land, have revived fears of haze blanketing neighbouring countries in a repetition of a regional environmental disaster two years ago.

Riau authorities last month called for the closure of schools, especially at nursery and primary levels as forest and scrub fires worsened, saying that youngsters were most vulnerable to the effects of the smog. They have also called on schools to refrain from conducting outdoor activities.

Forest fires have reappeared in the lower half of Sumatra island and several parts of Kalimantan since June. But occasional rain has stopped the haze from reaching the levels it hit in 1997, when huge forest and ground fires during a prolonged drought destroyed more than 10 million hectares of Indonesian forest.

In 1997 and early 1998, the smoke haze covered a wide swathe of skies over Indonesia and neighbouring countries, causing massive economic losses along with serious health problems and visibility hazards to ships and planes.

Indonesia decreed a "zero-burning" policy early this year but it has gone largely unenforced with officials citing a lack of funds and personnel.
 

Economy and investment

Inflation down in August, exports up

Jakarta -- Consumer prices in Indonesia fell 0.93 percent in August from July, the sixth consective monthly fall this year, Central Bureau of Statistics chief Sugito Suwito said Friday.

Exports in July were worth 3.971 billion dollars, up from 3.559 billion dollars in June, he added, while imports in the month totalled 1.964 billion dollars against 1.895 billion in June.

Suwito said food prices in July led the inflation fall by dipping 4.02 percent from the previous month. Transport and communication prices were down 0.15 percent.

But processed food and cigarette prices were up 0.21 percent, housing prices declined 0.11 percent, clothing prices were up 0.83 percent and health care was 0.68 percent more expensive.

In trade, Suwito said non-oil and gas exports for the month totalled 3.259 billion dollars against 3.013 billion in June, while non-oil and gas imports totalled 1.627 billion dollars against 1.685 billion in the previous month.