Angry protesters have set fire to more than 20 homes in East Timor's capital Dili, in a sign that the violence which has blighted the city may not be over.
Mr Alkatiri may have resigned but he is still a powerful figure
Stone-throwing youths are also reported to have attacked a refugee camp.
Analysts had hoped that the resignation of Prime Minister Mari Alkatiri earlier this week would end the crisis.
It is unclear who was behind the latest violence - both supporters and detractors of the former prime minister have been massing in the area.
Thousands of people supporting Mr Alkatiri and the ruling party Fretilin have gathered outside the capital, where they are thought to be preparing to march to Dili later on Wednesday.
But hundreds of anti-Alkatiri protesters are camped outside the main parliament building in the city, where they have been holding demonstratrations since last week.
International peacekeepers have increased patrols in the city, in case of further unrest.
Local people are also fearing the worst. "I am very worried," one businessman told Reuters news agency as he put shutters up on his kiosk. "I have taken my valuable stuff away."
Bowing to pressure
East Timor has been beset by unrest since Mr Alkatiri sacked 600 disgruntled soldiers in March.
Gun battles between the rebel soldiers and those loyal to the government then broke out, with machete-wielding youths forcing thousands to flee their homes in fear.
Mari Alkatiri's supporters are planning to enter the capital
As well as blaming him for triggering the violence, Mr Alkatiri's opponents also allege that he formed a hit squad to kill his political rivals - a charge he firmly denies.
Mr Alkatiri's resignation had been seen by many as the solution to easing months of political crisis.
But even though he has now stepped down, and President Xanana Gusmao has announced plans for a caretaker government, tensions still remain.
Thousands of supporters of Mr Alkatiri rallied outside Dili on Tuesday, saying they wanted to march into the capital.
But in his first address since his resignation, the ex-prime minister urged them to wait "a day or two" before entering the city.
He also appeared to hint at a possible come-back.
"We are people who don't want violence and want to win again in 2007," he said, referring to next year's scheduled election.
Have you been affected by the violence in Dili? Do you think the resignation of Mr Alkatiri might pave the way to a peaceful settlement? Send us your comments and experiences.
I live in the main business area here in Dili and today as the mob moved in and out of the city I can see fear in peoples eyes which only means that things will still become worse... almost all commercial establishment are closed today making things worse for us foreigners to even buy basic needs and I really think that more peacekeeping troops should be stationed in the main business area to prevent looting and violence.
Franklin Tan, Dili
I think after the East Timor prime minister resigned, it's more or less good. Hopefully our president Mr.Xanana Gusmao will take all responsibilities to solve this problem immediately.
I appeal to my people in East Timor. Why are you behind this Alkatiri to become prime minister? Let him step down. East Timor is not his country.
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