DILI, East Timor (AP) – Youths with machetes, slingshots and spears rampaged across East Timor’s capital Saturday, attacking people, burning houses and deepening a crisis that has sent thousands fleeing in terror despite the deployment of foreign troops.

Gangs roamed the streets of Dili for a second day today, setting fire to homes and businesses in defiance of foreign peacekeepers sent to quell the violence. Gunfire was also heard, but there was no immediate word on casualties.

With chaos spreading, the United Nations said it would relocate employees’ families and nonessential staff to Darwin, Australia.

The violence raised worries that one of the world’s youngest nations is plunging into civil war seven years after its break from 24 years of repressive occupation by Indonesia.

Festering distrust between Timorese who supported independence and those who didn’t fueled a monthslong dispute between the military leadership and 600 renegade soldiers that exploded in this week’s violence. The soldiers – nearly half the army – were fired in March after striking over complaints of poor working conditions and discrimination.

After engaging in deadly riots last month, the dismissed soldiers fled the seaside capital to set up camp in the surrounding hills and threatened guerrilla war if they weren’t reinstated.

They ambushed troops in the capital Tuesday, setting off three days of gunbattles that led the government to request foreign help. Hundreds of peacekeepers from Australia and Malaysia began arriving Thursday to take up positions around Dili, but violence was unabated. U.N. Special Representative of the Secretary-General, Sukehiro Hasegawa, said Sunday more peacekeepers were needed to halt the violence.

On Saturday, gangs of youths roamed through neighborhoods, smashing windows and torching cars and houses.

and attacking people in the streets with machetes, slingshots and spears. Sporadic gunfire crackled after sunset and flames glowed in the night sky.

The violence had so far killed 23 people and injured dozens. Seven people were reported wounded Saturday, though the real toll was likely higher.

The general population has split between those with ties to the western part of the country, which borders Indonesia and has perceived sympathies to the former ruler, and those allied with the east, which favored independence.

“The west and the east, they want to fight. They are enemies from long ago. Now they are trying to provoke each other,” Anim, a mother of four, said as she prepared for a night in an overcrowded refugee camp at the U.N. headquarters. “The Timorese are fighting, so we are afraid. At night they fire guns, or maybe worse, so I had to run to the United Nations.”

The dismissed soldiers are largely from the west, the military leadership from the east. Many of the renegade soldiers claim they were denied promotions and coveted assignments because of discrimination.

The U.N. envoy to East Timor said the relocation of personnel and their families was a temporary measure.

“As head of the mission, I am responsible for the safety of all personnel and therefore after careful deliberations, I think a temporary relocation for nonessential staff is the most judicious choice at this time,” Special U.N. Representative Sukehiro Hasegawa said.

The world body will keep more than 100 international staff in East Timor while others work from Australia, Hasegawa said.

Australian troops patrolled streets on foot and in armored vehicles and roared overhead in Black Hawk helicopters trying to calm the city Saturday. The soldiers disarmed one group of 40 young men, but other gangs were on the loose.

Australia said Sunday it will send up to 50 federal police officers within 24 hours to help contain the marauding gangs in Dili. The police reinforcements will join 15 officers already in the capital, Australian Defense Minister Brendan Nelson said.

Dozens of houses and cars were set ablaze in one early morning attack. Women and children fled screaming to seek shelter at a nearby church. Thousands of others loaded provisions onto trucks and cars and drove to embassies, the airport or makeshift shelters.

Prime Minister Mari Alkatiri called the violence “planned and opportunistic actions of gangs” that he said was part of a plot to overthrow his government.

“What is in motion is an attempt to stage a coup d’etat,” he said. “It is obvious that, first and foremost, we hope that this intervention puts an end to the violence that we have been going through over the last days. This will take time.”

But the upheaval led to talk that the government might not survive.

Julio Dos Reis, a 34-year-old prison guard, accused the government of failing to intervene in time to stop the unrest.

“The government made big mistakes,” he said, holding his 2-year-old daughter, Jequioda. “I am saddened and afraid. We are brothers and sisters now fighting each other.”

AP-ES-05-27-06 2126EDT

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