The August referendum result was accepted by "all factions", according to the assembly's chairman, Amien Rais.

Indonesia has ruled East Timor since invading the former Portuguese colony in 1975.

The assembly's decision to ratify East Timor's independence vote came on the day United Nations peacekeepers found the first evidence of a mass grave in the territory.

More than 20 bodies were discovered in the town of Liquicia, 20 miles west of the capital Dili.

UN peacekeepers will now take over in the territory from the Australian-led international peacekeeping force Interfet.

Dr Mahathir wants Malaysia to take command

Malaysian Prime Minister Mahathir Mohamad has said his country wants to command the new peacekeeping operation.

And Australia has said it wants one of Indonesia's neighbours in the Association of South East Asian Nations (Asean) to lead the peacekeeping force.

But Timor independence leader Jose Ramos Horta said on Friday that the East Timorese would not accept an Asean state as leader of the UN transitional administration because they had been "accomplices of Indonesia".