East Timor's rebel leader yesterday rejected an agreement designed to end the chaos that has engulfed the tiny nation and demanded the sacking of the country's embattled prime minister.
Major Alfredo Reinado said President Xanana Gusmao had made a "mistake" when he took emergency control of the police and military but resisted calls to sack Prime Minister Mari Alkatiri.
"This it's not a solution, he [Alkatiri] is a criminal and should not be allow to stay as prime minister," Reinado said, as sporadic arson attacks continued in the capital.
"That is the mistake that the president has made," he added.
Reinado was speaking by mobile phone from his base outside the capital Dili, where he is holed up with nearly half the country's 1,400-strong military sacked by Alkatiri after going on strike over alleged ethnic discrimination.
Clashes between government and rebel forces quickly descended into gang warfare between rival groups from the east and west of the country who went on a burning and looting rampage in the capital.
After two days of crisis talks in the capital, as mobs battled with swords and machetes nearby, the hugely popular Gusmao on Tuesday announced 30 days of emergency rule and the sacking of the defense and interior ministers.
In a statement he said he was "implementing the necessary measures to prevent the violence and avoid further fatalities" as well as for the "rapid re-establishment of public order."
Reinado would not comment on whether the rebels were ready to surrender their weapons to the 2,250 troops from Australia, Malaysia and New Zealand. Some 120 Portuguese paramilitaries will arrive today.
But Alkatiri denied that Gusmao, a former guerrilla leader regarded as a national hero, had full control of the military. The prime minister insisted he still commanded wide support.
"Defense and security are still part of the government and I am the head of the government," Alkatiri told the Australian Broadcasting Corporation.
"If my party decided to call for a rally we would get up to 100,000 or more people in the streets," he added. "I will be prime minister until the next election."
The US renewed its travel advisory after a day of fresh running battles between gangs of masked youths on Tuesday.
UN Secretary-General Kofi Annan expressed concern about the violence and described the withdrawal of a UN mission last year, which had operated since independence in 2002, as premature.
"It's really sad and tragic that we have to relive this experience again in East Timor," Annan said.