General Peter Cosgrove suggested a progressive laying down of arms as he set out the peace proposals in the capital Dili on Saturday.

He said pro- and anti-independence militias who gave up their weapons would be invited to join the new East Timorese Government.

His comments came as a senior Indonesian Government official pledged that his country would help East Timorese refugees return home from neighbouring West Timor.

Gen Cosgrove, who is commander of the Australian-led Interfet force, said pro-Indonesia militias would be welcome to participate in the peace plan.

"It's a sincere offer and it's one that acknowledges that they too have a case within society here," he told ABC television. "But there is a fundamental first principle and they must disarm."

Golden opportunity

Gen Cosgrove said he was concerned by reports that hundreds of former members of the Indonesian armed forces and police had joined the militias, now gathering in West Timor.

The BBC's Jim Fish: "Peace is slowly returning to east Timor"

Pro-Jakarta militias have been blamed for much of the violence that ravaged the territory in the wake of a vote for autonomy at the end of August.

Gen Cosgrove urged the militias to seize what he described as a golden opportunity of negotiation, which would secure their right to live peacefully in East Timor

Pro-Jakarta militias are believed to be effectively controlling dozens of refugee camps in West Timor. An estimated 230,000 East Timorese fled over the border to escape recriminations after the vote.

A repatriation programme is now underway by international aid agencies. Over the past 24 hours, the United Nations refugee agency, UNHCR, has flown more than 350 refugees back to Dili from West Timor.

'Refugees exposed to pressure'

But UN officials say they are encountering problems with the operation. They say Indonesia is using a system of registration that would clearly identify those refugees who want to return home.

This, officials argue, exposes such refugees to pressure by militia groups who want them to remain in West Timor or migrate to other areas in Indonesia.

One deportee, who returned to Dili from a camp in Kupang, the capital of West Timor confirmed some people were too frightened to say they wanted to return to East Timor.

"Many people are scared because if there are Indonesian people in the compound, they are scared to express (their desire to go back) so they don't say anything or sometimes they pretend," said Pedro Lebre. "They say 'I want to stay', but they then try to find some way to escape."

Promise of co-operation

The UNHCR says aid workers are unable to enter border camps without police escort. Around 150,000 refugees are believed to be being held against their will in border areas of West Timor by pro-Indonesia militias.

Michael Barton, of the UN's Office for the Co-ordination of Humanitarian Assistance, called for the UN to have full access to the camps.

Aid agencies have begun repatriating refugees

"We are concerned that the UNHCR among other humanitarian agencies be fully associated with this process so that the climate in which this registration takes place is devoid of any pressure," Mr Barton said.

On Saturday, the Indonesian Welfare Minister, Haryono Suyono, who is heading an official delegation to West Timor to oversee the repatriation operation, promised to co-operate with aid workers and ensure they got access to the refugees.

Our correspondent in West Timor, Jonathan Head, says the move is seen as an attempt by some parts of the Indonesian Government to repair the damage done to their country's reputation by the behaviour of Indonesian troops in East Timor.