East Timor leader calls for calm

Foreign peacekeepers have already had some effect

East Timor's President Xanana Gusmao has appealed for calm to end rampant mob violence in the fledgling country.

"Stop this fighting that is dividing us," Mr Gusmao told crowds outside the presidential palace, where he held crisis talks with the Cabinet.

Among the crowds were protesters demanding the resignation of Prime Minister Mari Alkatiri, who is blamed by many East Timorese for the unrest.

Australia says troops it sent last week had had an immediate effect.

Witnesses said some houses were burned in parts of the capital, Dili, on Monday morning, but that the city was generally quieter.

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But thousands of people have fled their homes and aid agencies say their supplies are being looted.

Monday's Cabinet meeting was the first face-to-face meeting between Mr Gusmao and Mr Alkatiri - who are known to have differences - since foreign peacekeepers stepped in.

"Alkatiri is a terrorist! We will kill him! Viva Gusmao!" protesters shouted.

The immediate cause of the unrest was the sacking by Mr Alkatiri of 600 striking soldiers in March.

The soldiers, who were mainly from the west of the country, complained of discrimination against them by leaders from the east.

The sacking has led to ethnic and regional violence, with gangs - toting guns and machetes - torching houses and vehicles.

Around 100 youths broke into a food warehouse run by the World Food Programme in the capital, Dili, on Monday and carried off bags of rice, past hundreds of people who had queued for hours for handouts, AFP news agency reported.

Australian aid agency World Vision said the violence and looting threatened the distribution of food and water supplies to 25,000 internal refugees, and called for more forthright intervention by Australian troops.

"Our staff here have been under fire," World Vision chief Tim Costello said.

"I came here fully expecting... I'd see a couple of soldiers on each street corner, which would settle everything down. That's not the case, you still see the gangs of young people just looting."

Australian Defence Minister Brendan Nelson said commanders on the ground had met military and political leaders in East Timor to request that their rules of engagement be strengthened.

Capital calmer

Foreign Minister Jose Ramos-Horta has admitted that the government's failure to address discontent in the security forces was one of the main causes of the violence, which has threatened to escalate into civil war.

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Mr Gusmao and Mr Alkatiri are reported to differ in the solutions they favour. The president wants the rebel soldiers to be reinstated while their grievances are investigated, but for the military as a whole to disarm for the moment and foreign troops to take charge, sources close to the government told the Associated Press.

The prime minister, however, is said to have opposed foreign intervention, and wants the rebel soldiers to disarmed and the rest of the security forces to resume work as soon as possible.

While Mr Gusmao is seen as a charismatic hero of East Timor's fight for independence from Indonesia, Mr Alkatiri - who spent a long period in exile - is seen as cold and aloof, correspondents say.

At least 20 people are reported to have been killed in the violence.

The death toll includes 10 unarmed police officers whom the East Timorese military suspected of aiding the rebels and were shot dead by troops.

UN envoy Sukehiro Hasegawa called on Monday for a full investigation into the incident.

The Red Cross said as many as 50,000 people had fled their homes to escape the violence, and aid agencies are predicting a humanitarian crisis unless order is restored soon.