The president did not give details about how or when the peacekeepers would go into the territory, which has been devasted by anti-independence forces in the past week.

BBC News' David Willis: U-turn comes after enormous international pressure

In a televised address to the nation from the Merdeka Palace in Jakarta, Mr Habibie said: "A couple of minutes ago, I called the UN Secretary-General Kofi Anna to inform him about our readiness to accept international peacekeeping forces in East Timor."

"Too many people have lost their lives since the beginning of the unrest. We cannot wait any longer. We have to stop the suffering immediately."

President Habibie: "A couple of minutes ago I called Mr Kofi Annan ..."

The announcement came after an emergency session of the Indonesian cabinet in which the president was briefed by armed forces chief General Wiranto who visited the territory with a UN delegation on Saturday.

The move follows intense international pressure for Indonesia to allow a peacekeeping force.

(Click here for a map of the area)

The BBC correspondent in Jakarta, David Willis, says President Habibie has caved in to intense international pressure to allow a peacekeeping force into the territory.

'Continued violence'

BBC News' Jon Kay: Still not clear how many UN troops would be allowed and when

There are unconfirmed reports from East Timor that Indonesian troops and militiamen have attacked refugees in the town of Dare, 10km (six miles) to the south of the capital, Dili.

Mrs Robinson: "Savage violations of human rights"

In telephone calls from around the town, local people spoke of attacks on the thousands of refugees who have gathered there.

There is no independent confirmation of the shootings or any word on casualties. The Indonesian authorities deny it and say the situation in Dare is calm.

The UN human rights commissioner, Mary Robinson, has called for an international war crimes tribunal to be set up to investigate what she called the savage violations of human rights in East Timor.

Mrs Robinson, who has been visiting refugees in the Australian city of Darwin and is on her way to Jakarta, says the international community had to try to identify the main perpetrators of atrocities in the territory.

Clinton engaged

US President Bill Clinton has announced that the United States is reviewing all its economic and commercial programmes in Indonesia because of the situation in East Timor.

The BBC's Phillipa Thomas: "President Clinton's rhetoric has got tougher"

Speaking at the Asia-Pacific summit in New Zealand, Mr Clinton said Washington was ready to support Australia's efforts to mobilise an international force to restore security to the territory.

The US has already suspended military co-operation, assistance and sales, but the president reiterated that his willingness to support future economic assistance would depend on how Indonesia handled the situation from now on.

On 30 August, three-quarters of East Timor's 800,000 people voted for independence in a UN-supervised referendum.

Anti-independence militias with the active support of Indonesia's military and police have since waged a campaign of terror against the territory's people and UN staff.

Other top stories

• IMF suspends talks with Indonesia
• Dili: Back to year zero
• East Timorese forced into camps
• Analysis: UN's tattered credibility
• Analysis: Is President Habibie in control?

(click here to return)