The UN has ordered all non-essential staff out of East Timor, which has been hit by a fresh outburst of violence.
Old ethnic rivalries have fuelled the tension and violence
Militias armed with guns and machetes have rampaged though the capital, Dili, torching houses and vehicles.
Hundreds of people fled their homes to find shelter in churches, as Australian troops tried to restore order.
A BBC correspondent says East Timor seems to be tearing itself apart, with the latest communal clashes coming amid a dispute between military factions.
Prime Minister Mari Alkatiri said the country was facing a coup attempt, but did not know who was behind it.
He said Foreign Minister Jose Ramos Horta was holding talks with the rebel soldiers whose grievances are believed to have sparked the unrest.
He was speaking after Australian troops disarmed a group of men armed with machetes who had gathered in the centre of the capital, Dili.
The fighting has left at least 20 people dead in the past week.
The BBC's Phil Mercer, in Dili, says the troops have made a difference, but adds that immense challenges lie ahead.
The Australian soldiers are to be reinforced in the coming days by hundreds more troops, as well as forces from Malaysia, New Zealand and Portugal.
However, many non-essential UN staff are pulling out and face evacuation to Darwin in northern Australia, a UN spokeswoman said.
Feb: More than 400 troops strike over pay and conditions
March: Government sacks nearly 600 of 1,400-man army
April: Rioting by sacked troops leaves five people dead
May: Violence intensifies; government appeals for foreign assistance
About 390 people will be flown out, starting this weekend, leaving about 50 staff to keep the UN mission to East Timor (UNOTIL) running.
Civilian militias - groups of youths who have aligned themselves with one of the sides in a military dispute that has split the nation - roamed through neighbourhoods in southern Dili early on Saturday, pelting houses with rocks and setting them on fire.
The unrest began in March, when nearly 600 of the army's original force of 1,400 went on strike for better working conditions. They were subsequently sacked.
They have since gone to the hills, from where they have threatened to launch a civil war.
Tension turned to violence and five people were killed in clashes in April. Tens of thousands fled Dili fearing further unrest.
Correspondents say political infighting and ethnic gang rivalry have added to the violence.
Some of the suspicion dates back to Indonesia's occupation of the country.
Nine unarmed policemen were shot dead on Thursday by troops who accused them of aiding the rebels.
On Friday five children and an adult were killed in a house that was deliberately set on fire.
Australia has experience of providing military aid to East Timor as it led a UN-sponsored force into the country in 1999 to end the unrest sparked when the population voted for independence from Indonesia.
UN peacekeepers only left East Timor a year ago.