1. (U) Summary:
President addresses Parliament;
Fretilin presents itself as the victim;
Ramos-Horta briefs diplomatic corps on GOET requests for post
UN-mission;
Prime Minister wants Timorese control of police;
Security environment;
End Summary.

President addresses Parliament


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2. (U) In an address to Parliament today, President Xanana
Gusmao accepted responsibility for the current crisis on behalf
of the sovereign institutions of East Timor and reaffirmed his
commitment to act in accordance with the Constitution. The
President then informed Parliament of his planned travel to Bali
next Saturday to thank Indonesian President Susilo Bambang
Yudhoyono for recent humanitarian assistance. Gusmao also
announced a compromise with Prime Minister Mari Alkatiri on the
criminal defamation provision of the pending penal code.
Gusmao, who had objected to the provision (see Ref A), will
accept criminalizing defamation provided that it be punished
only with a fine, not with prison time. To enact this
compromise, Alkatiri will ask Parliament to extend the
legislative authorization, which will allow GOET time to
re-draft the code and publish it in the official bulletin. The
President also asked Parliament to give quick attention to the
Government's USD 312 million budget proposal, which includes USD
10 million to reconstruct homes destroyed in recent violence;
USD 11 million for public grants for job creation and related
activities; USD 8 million for food security; funds for a pension
fund for former combatants; USD 5 million for electricity
subsidies; and funds for rural credit, community development,
and social activities. Gusmao also thanked all national and
international actors who have contributed to humanitarian relief
and peacekeeping. He reiterated appeals by various Government
of East Timor (GOET) leaders for a renewed UN presence and an
international investigation into the violent events of April 28
and May 25 and related matters.


Fretilin presents itself as the victim


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3. (U) The Embassy obtained a Portuguese language copy of the
Resolution against Violence, which a bare quorum of Parliament
approved yesterday after opposition party members walked out of
Parliament in protest of the resolution (see Ref B). The
resolution contains general statements against violence and
disunity and calls for the international forces to get control
the situation quickly. Most provisions of the resolution,
however, amount to a highly idiosyncratic analysis of recent
events in which Fretilin and its leaders are exonerated from any
responsibility for the violence and are instead cast as its
principal victims. The resolution:

-- Specifically repudiates accusations that the Prime Minister
and the ruling party (Fretilin) armed groups of civilians;

-- Repudiates "acts of terror" committed against Fretilin
members and offices (with no similar condemnation of violent
acts committed against non-Fretilin individuals);

-- Calls for international military forces to withdraw to a
security perimeter around Dili and to allow the Portuguese
paramilitary police (GNR ) and other international police forces

DILI 00000308 002.2 OF 003


to control law and order in the city; and

-- Calls on international forces to "confine" various
anti-government groups, including dissident groups of Timorese
military (F-FDTL) and police (PNTL) who as well as the
petitioners (the 595 F-FDTL members dismissed in March).



4. (U) Fretilin leaders also issued an official communique
today. Although it was issued under the name of President of
Parliament Francisco Lu'Olo Guterres, who is also President of
Fretilin, it referred to Lu'Olo and to Prime Minister Alkatiri
frequently in the third person ("Comrade Lu'Olo" and "Comrade
Mari Alkatiri") and reiterated most of the points in
yesterday's resolution. In the message, Lu'Olo denounced claims
that Fretilin has distributed firearms to "intimidate or kill
anyone," noting that Fretilin fully expects to win the 2007
elections and therefore has no need to distribute firearms. The
message also included multiple references to the large majority
Fretilin currently enjoys in Parliament as well as references to
"manoeuveres" and "manipulations" aimed at "deposing our
Constitutional Government." It also urges Fretilin members "to
create and strengthen FRETILIN's structures to carry out
vigilance within their neighborhoods."



5. (C) Comment: Both the resolution in Parliament and the
Fretilin statement contain phrases that might be designed to
distance the party from the alleged actions of Prime Minister
Alkatiri and former Interior Minister Rogerio Lobato. Both
documents denounce violence, and today's statement notes the
recent creation of a political committee to manage the affairs
of the party in between party congressess. This could be
interpreted as a reminder to Alkatiri, who is Fretilin
Secretary-General, that he does not singlehandedly run the

SIPDIS
party. Other language in both documents, however, explicitly
defend Alkatiri and/or appear to reject reported attempts from
more moderate Fretilin insiders to loosen the hold of the Prime
Minister and President of Parliament over the party and its
policies. End Comment.

Ramos-Horta briefs diplomatic corps on GOET requests for post
UN-mission


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6. (U) In a briefing today for the Dili diplomatic corps,
Foreign Minister Ramos-Horta outlined elements of what he
described as the GOET position on a new United Nations mission.
He began by saying there should be "robust United Nations
police force" with several elements including operational
police, a rapid reaction force, and a unit to retrain the
Timorese police. He said the international police force should
be headed by a UN police commissioner who should have overall
command of policing in East Timor. Ramos Horta added that the
current international military forces "should transition to UN
peacekeeping force," perhaps in six months or a year. The
Minister added that even after this transition is complete,
command of the peacekeeping force "should be held by the largest
contributing force" --- a clear reference to Australia ---
unlike in previous UN missions that have rotated the command and
sometimes given it to small countries that did not contribute
substantially to the force. Finally, Ramos-Horta said there
should be civilian elements including a human rights and justice
component, which might conduct the investigation GOET has
requested into the violence committed in East Timor since April


28. Although in other recent statements Ramos-Horta has
requested that the United Nations "organize and administer" East
Timor's upcoming national elections, in today's briefing he made
no such reference.

Prime Minister wants Timorese control of police


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7. (C) In a chance encounter with Prime Minister Alkatiri,
Emboffs learned that the Alkatiri wants police trainers and a

DILI 00000308 003.2 OF 003


formed police unit as part of a new UN mission, but believes
executive authority for policing in the country must be under
the authority of GOET, not the UN. This is contrary to frequent
public and private statements made recently by Foreign/Defense
Minister Ramos-Horta, who has clearly requested --- ostensibly
on behalf of GOET --- that the UN assume authority for policing.
See paragraph 6. Ramos-Horta's position is shared by President
Gusmao, so his assertions that it is the GOET position are
technically accurate in light of the President's recent
assumption of authority over security and defense.


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8. (SBU) Contacts reported at least one arson and several
gunshots last night. None of these disturbances were targeted
toward Americans or other foreigners. Embassy sources reported
that the JTF and GNR forces have begun conducting systematic
searches for weapons in private homes in some of Dili's more
troublesome neighborhoods. During the last two or three days
numerous truckloads of people have left internally displaced
persons (IDP) camps in Dili to return to their family homes in
the three eastern ("lorosa'e") districts, apparently at the
behest of local leaders in these districts who believe that
lorosa'e people in Dili are not being adequately protected.
Although this exodus will decrease congestion in overcrowded IDP
camps, some observers have expressed fears that it could
increase the level of east-west polarization and mutual
misunderstanding.
REES