DILI, East Timor (AP) – Prime Minister Mari Alkatiri, the man at the center of East Timor’s current crisis, concedes only one mistake in the events that led to his young nation’s descent into chaos.

When he fired almost half the country’s 1,400-member defense force, he should have done it one by one, not all together, he told The Associated Press in an interview Saturday.

“In every country in the world, if soldiers abandon their barracks, they have to be sacked, but the process has to be done properly,” said 56-year-old Alkatiri, who is now guarded by heavily armed Australian peacekeepers.

“The procedure was wrongly done,” he said.

His March dismissal of 600 soldiers catalyzed factional rifts in the military and the government.

Protests by the disgruntled soldiers escalated to clashes with loyalist troops and eventually led to a collapse in security that has seen widespread gang violence, looting and arson in the capital Dili over the past week. At least 30 people have died.

Before they were fired, the soldiers had gone on strike, claiming the government discriminated against them because they came from the west of the country, which is perceived to be more sympathetic to former occupier Indonesia.

The soldiers, joined by an unknown number of police defectors, have set up camp in the hills surrounding the capital city and have threatened to wage guerrilla warfare if Alkatiri does not resign his government office.

Alkatiri blamed pro-Indonesian militias responsible for massacres of civilians in 1999 for some of the unrest.

“I was told that some actions – the burning of houses and other violence, civil unrest – some ex-militias are involved, militias of 1999,” he said.

“It is a very well-planned action, surely directed by a third party.”

Indonesian Foreign Minister Hassan Wirajuda said his country had not instigated East Timor’s unrest.

“It’s in the interests of Indonesia to see our neighbors as peaceful as possible,” he told reporters.

Australian Foreign Minister Alexander Downer, on a visit to East Timor on Saturday, said there was no evidence that Indonesia was involved.

More than 2,000 peacekeepers from Australia, New Zealand, Portugal and Malaysia are patrolling Dili’s streets. Though violence has eased, the capital remains unsafe.

Aid groups estimate that 100,000 residents have fled the chaos to increasingly squalid camps in the city, or left the capital altogether.

Gregory Garras, head of the U.N. refugee agency’s emergency team in East Timor, warned during a visit to Dili Saturday that the camps were a potential flashpoint for fresh violence. He cited reports of fights, and rumors that weapons were filtering into some camps.

“People are living in a desperate situation, cheek to jowl. There’s no privacy, it’s hot, there’s insufficient water. The conditions are absolutely untenable,” he said.

Downer, whose country is leading the peacekeeping force, said an “international police presence” would be needed and should operate under the auspices of the United Nations.

The U.N. shepherded East Timor’s independence process from Indonesia in 1999 and scaled back operations after it declared formal independence in 2002.

“We believe that the United Nations should have a bigger role in the immediate future here in East Timor, assisting with the process of reconciliation,” Downer said.

A savvy but widely disliked negotiator, Alkatiri has resisted calls for his ouster. He said he would resign only if his ruling Fretilin party voted him out of office – an unlikely option after his re-election as leader last month.

Criticized as aloof and abrasive, Alkatiri is the embattled symbol of a government in virtual paralysis.

He has negotiated hard with President Xanana Gusmao in recent days to reach compromise to defuse the crisis. Two of Alkatiri’s allies, the interior and defense ministers, quit this week in a Cabinet reshuffle.

In contrast to Alkatiri, Gusmao is an adored independence hero who had stayed out of the bruising grind of daily politics.

A Muslim of Yemeni origin, Alkatiri is an anomaly in a country whose population is overwhelmingly Roman Catholic.

He left East Timor in 1970, just a few years before Portugal abandoned its Southeast Asian colony. He lived in Angola and Mozambique, studying to become a chartered surveyor and lawyer.

He helped found his party, which had Marxism as an early influence, making it – and Alkatiri – a figure of suspicion in Western circles. He met Fidel Castro in Cuba last year.

During Indonesia’s often brutal 24-year occupation which ended in 1999, Alkatiri campaigned for the separatist cause at the United Nations with Jose Ramos Horta, who later won a Nobel Peace Prize and is now foreign minister and defense minister. The current crisis has exposed tensions between the two men.

Alkatiri also has problematic ties with Australia, which last sent peacekeepers to East Timor in 1999 after pro-Indonesia militias devastated the territory following a vote for self-rule.

In the current crisis, Australian Prime Minister John Howard raised questions about the quality of governance in East Timor, an apparent slap at Alkatiri.

AP-ES-06-03-06 1508EDT

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