Peacekeepers have upped their presence on the streets
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East Timor's prosecutors have issued an arrest warrant for the former interior minister on allegations of arming civilians, a UN official has confirmed.
Rogerio Lobato is accused of supplying weapons to a rebel leader who claims he was hired to act against opponents of embattled PM Mari Alkatiri.
The warrant comes as protesters gathered in the capital, Dili, to demand Mr Alkatiri's resignation.
They blame him for failing to deal with the violence of the last few months.
At least 21 people have died in clashes and thousands have left their homes to seek safety in refugee camps.
Warrant
Donna Cusumano, spokeswoman for the United Nations Mission in East Timor, confirmed that a warrant for Mr Lobato's arrest had been issued.
It related to accusations that Mr Lobato distributed arms with the intent to alter the public order and the democratic rule of law, she said.
Rebel leader Vincente "Railos" de Concecao had claimed that he and his group of fighters had been recruited and armed by Mr Lobato to target Mr Alkatiri's opponents.
Mr Lobato resigned from his post as interior minister on 1 June after President Xanana Gusmao assumed control of the security forces in a bid to control the violence.
Mr Alkatiri has denied the allegations and says people are trying to demonise him.
Protest
But in Dili, hundreds turned out at the government palace demanding that Mr Alkatiri step down.
Demonstrators have vowed to continue their protest
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They blame him for a decision to sack 600 soldiers in March which led to clashes within different factions of the security forces and later sparked ethnic and gang violence.
Organisers say they expect 1,000 people at the rally and vow to stay "as long as it takes".
"If we are not confident in him to administer this government, it is our obligation to call on him to step down," Augusto Junior Tidade of the National Youth Forum said.
The crowd responded with shouts of "Step down! Step down!", the Associated Press news agency reported.
Foreign peacekeepers have upped their presence on the streets and have set up checkpoints on the main road into the city to check for weapons.
More than 2,200 peacekeepers, from Australia, New Zealand, Malaysia and Portugal, are currently in the country to help restore order.