Officials say the latest reconnaissance flights over East Timor show massive destruction inflicted by pro-Indonesian militias in the west of the territory.

UN senior humanitarian advisor Joe Barr said one of his colleagues likened the destruction to cigarette burns in a giant carpet.

"Like cigarette burns across a giant carpet"

"The job is huge," said UN spokesman David Wimhurst.

"It is overwhelming to see but at the same token all this devastation was caused by human beings and it can be made right by human beings," he Australia's told Nine Network television.

One official said nearly all settlements in the territory had been severely damaged, and some towns had been nearly wiped out.

Hiding places

As international peacekeepers begin to assert their control across East Timor, officials say they expect between 30,000 and 70,000 refugees to emerge from mountain hiding places.

Australia says the military operation alone will cost it more than $500m

Many are expected to be in desperate need of food and medical aid and most are likely to find their homes and all their possessions have been destroyed.

"The people are anxious to return to the ruins of their homes and what they hope for is to have the security and peace to rebuild their lives," pro-independence leader Leandro Isaac told reporters in the town of Dare.

Australia says it will play a major role in the reconstruction effort but called on other nations to contribute as well warning it could not shoulder the burden alone.

"This is something for the whole of the international community and the region in particular," said Australian Treasurer Peter Costello.

Defence Minister John Moore has said that the cost of Australia's military contribution alone will run to more than $500m.

International aid

Officials say it is psychologically important to restore commerce

The World Bank has announced that it is ready to offer an aid package to East Timor in conjunction with the International Monetary Fund.

Bank chief James Wolfensohn said the institution's "post-conflict group", which is experienced in recent recovery operations in Kosovo and Bosnia, would visit the territory sometime in October.

Aid officials already on the ground in East Timor say they are keen to begin work on small infrastructure projects as soon as possible as a way of putting the territory back on its feet.

Gilbert Greenall, part of the UK delegation to East Timor, told the Reuters news agency that experience in other war zones showed that cleaning up market places, restoring basic utilities and encouraging commerce were psychologically important to rebuilding communities.

"It's amazing what a difference you can make just by switching on the streetlights," he said.

On Tuesday the freed East Timorese independence leader, Xanana Gusmao, is expected to meet UN Secretary-General Kofi Annan in New York to discuss the future of the territory.