East Timor's embattled premier steps down

The premier had faced demands to quit since late May, when unrest on the streets rocked the capital Dili, leading to the deaths of 21 people and forcing nearly 150,000 people to flee their homes.

More than 2,200 foreign peacekeepers were deployed here to restore order but political leaders have since wrangled over how to move forward.

The pressure was cranked up last week when President Xanana Gusmao, a hero of East Timor's independence movement, ordered Alkatiri to resign to take responsibility for the crisis. He threatened to resign if Alkatiri would not.

Alkatiri faced the press on Monday, telling reporters: "I declare I am ready to resign my position as prime minister of the government... so as to avoid the resignation of His Excellency the President of the Republic".

The premier said he had "deeply reflected" on the present situation in East Timor and said the interests of the nation were paramount.

"Assuming my own share of responsibility for the crisis affecting our country, I am determined not to contribute to any deepening of the crisis," he said, adding that he would stay on as a member of parliament.

"I am ready to dialogue with... the president in order to contribute if necessary to the formation of an interim government," he said.

He said he hoped militants and his own party would accept his decision.

The statement was read out on the verandah of his official residence, in Portuguese, Tetun and English. Alkatiri did not take any questions.

There was immediate jubilation on the streets of Dili, where hundreds lined the roads in the city centre as truckloads of Alkatiri's opponents drove through, waving flags, cheering and singing songs.

"We're so happy that he has stepped down. He gave out weapons to the people to kill others and he divided the country into two halves," Rosario Bragaza, 24, a passenger in one of the trucks, told AFP.

He was referring to allegations that Alkatiri assented to having a hit squad formed to kill his opponents. An Australian documentary purporting to show evidence of Alkatiri's involvement triggered Gusmao's initial demand that the premier step down.

Alkatiri has denied the accusations and East Timor's prosecutor-general has said he has no evidence of his involvement. One of Alkatiri's allies however has been charged over distributing the arms.

The prime minister is also accused of triggering last month’s unrest by dismissing some 600 soldiers in March.