By Rebecca Henshchke
BBC News, Jakarta
Australian troops were sent in to restore order
The United Nations has begun transferring authority back to the police in East Timor.
Three police posts in the capital, Dili, are now under the control of local officers.
The UN took control of security two years ago, after police and army units fought pitched battles.
Australia sent 1,000 troops to restore order and a further 1,500 UN police were also deployed.
The UN special representative, Atul Khare, said the transfer marked an important milestone in restoring independence to the local police force.
It is a small step. The UN police force will continue to supervise the work of the few posts handed over.
The UN says the officers have gone through screening tests and mentoring programmes run by the foreign troops.
Last month, the International Crisis Group released a report warning that East Timor was at risk of an upsurge in civil unrest, unless it reformed the police and military.
Violence and looting erupted in the tiny nation in March 2006, after the then Prime Minister, Mari Alkatiri, dismissed a third of the armed forces for desertion, prompting the clashes between the police and the military.
More than 37 people were killed and about 15% of the population were forced from their homes.
Two years later, thousands of people remain in camps.
President Jose Ramos-Horta has called on the Australian and UN forces to stay to the end of the year at least.
He said the UN withdrew too quickly last time, following independence from Indonesia.