Indonesian President BJ Habibie has defended his government's loss of East Timor, saying the priority was to restore Indonesia's relations with the international community.

Addressing the People's Representative Council - Jakarta's lower house of parliament - Mr Habibie acknowledged to sceptical delegates that this was the first time an Indonesian head of state had been "invited" - in reality summoned - to appear.

He then gave a long, meandering account of Indonesia's 24-year occupation of East Timor.

As he spoke, around 50 nationalist demonstrators outside the parliament building shouted slogans protesting the surrender of East Timor to foreign troops.

Demonstrators show photos of relatives lost in East Timor

Mr Habibie rounded on Australia - the leading nation of the International Force for East Timor (Interfet) - accusing Canberra of "violating the norms of non-interference in another country's internal affairs".

Indonesia has been angered by Australia's prominent role in calling for international peacekeepers, and last week suspended its security cooperation agreement with Australia.

Mr Habibie also criticised what he called "irregularities and discrepancies" in the United Nations-run ballot last month, in which nearly 80% of East Timor's people voted for independence.

But - in what was in effect an exercise in face-saving - the president made no mention of the violence unleashed by pro-Indonesian militias, nor of the failure of the Indonesian security forces to control them.

East Timor will not gain formal independence from Indonesia until a joint session of both houses of parliament - known as the Consultative Assembly - ratifies it next month.

But that's also when Mr Habibie's term of office comes to an end - and there's growing speculation that following the humiliating loss of East Timor, the president's chances of re-election have been destroyed.