Hundreds of protesters today descended on East Timor’s capital to rally behind the ousted prime minister, triggering fears of more unrest as the president said early elections were the only way out of the country’s crisis.

Gangs hurled rocks at a camp housing refugees and torched buildings in East Timor’s capital today, as fresh violence erupted between supporters and opponents of former prime minister Mari Alkatiri.

East Timor’s leaders were trying to decide on a new prime minister today following the resignation of Mari Alkatiri, raising hopes for an end to months of political paralysis and violence in Asia’s newest nation.

East Timor’s president said he would decide whether to resign later today after hearing whether the country’s ruling party had agreed to sack the prime minister.

East Timor’s president was reconsidering his threat to resign, a Roman Catholic bishop said after meeting the popular leader today, as protesters demanding the resignation took to the streets, raising fears of fresh violence.

East Timor’s president gave his beleaguered prime minister a dismal choice today – resign or be fired – saying he no longer had the trust of the people following weeks of bloody street battles in the capital.

THE European Union signed a €18 million aid deal with East Timor’s government yesterday, pledging to support democracy and economic development in the nation which has been torn by violence in recent weeks.

The UN should help oversee elections in East Timor and stay involved in the violence-scarred nation for at least a decade, the foreign minister said today, noting that restoring order and building a democracy would take time and money.

About 2,000 protesters calling for the resignation of East Timor’s prime minister cruised around parliament in a convoy of horn-blaring trucks and motorcycles today, hours after mobs set buildings on fire and looted a warehouse filled with farm supplies.

EAST TIMOR’S ousted prime minister failed to appear yesterday for questioning over gunrunning charges that contributed to his downfall, saying he was immune from prosecution.

East Timor's president marked the tiny country's third anniversary today with a sombre speech warning that patience and sacrifice are still needed in the face of a moribund economy, stifling poverty and a declining UN presence.