Security collapsed as 600 renegade soldiers, dismissed in April after strike over perceived discrimination against western recruits and led by Maj. Alfredo Reinado, clashed with security forces. 30 killed since late April, including 10 disarmed police under UN protection, leading to deployment of over 2,000 mostly Australian troops 25-29 May at request of government. Arson attacks and looting throughout capital as urban gang members contributed to chaos, along with protests calling for resignation of PM Alkatiri. President Gusmao imposed emergency powers of full presidential control 30 May; defence and interior ministers resigned 1 June.

Protest against government sacking of 600 soldiers turned violent 28 April, at least 2 killed; was latest in series of demonstrations by troops - many from west of country - claiming discrimination in military.

Border patrol shot dead 3 Indonesians, reportedly former militia members, sparking protests. President Gusmao presented report on Indonesian occupation to UNSG Annan, which attributes 183,000 civilian deaths to Jakarta.

Joint Indonesian/Timor-Leste Commission on Truth and Friendship unveiled by foreign ministers 21 December. Likely to supersede UN plans for own enquiry.

UN Security Council unanimously voted to extend UN mission for final 6 months until 20 May 2005.

Maritime boundary talks with Australia continued. New framework whereby Timor-Leste foregoes boundary claims in return for oil/gas revenue may make December deadline achievable.

Secretary-General of Timor-Leste’s foreign ministry Nelson Santos urged UN peacekeepers to remain until 2005, citing potentially unstable border with Indonesia and delays training security forces. UN to review 604-strong force in October. Clashes broke out between gangs in Ainaro 16-18 August. Police commander killed and dozens of houses burned. Three Indonesian army commanders and 1 police officer convicted in 1999 of crimes against humanity by Jakarta ad-hoc human rights court had sentences overturned by Indonesia’s Supreme Court.

Approximately 100 former guerrillas demonstrated outside main government building demanding more reform 20 July. Vital revenue from Timor Sea oil/gas fields at stake in continuing border dispute with Australia.

Preliminary border agreement signed with Indonesia at meeting of Association of South-East Asian Nations in Jakarta 30 June. President Xanana Gusmao’s government not to pursue UN prosecutors’ arrest warrant for Indonesian presidential candidate Wiranto (indicted for crimes against humanity).

Dili took over responsibility for defence and internal policing 19 May. UN declared 12-month "consolidation phase" during which peacekeepers can be used in extraordinary circumstances. Security Council cut UN peacekeepers from 3000 to 700; gave 6-month mandate. Nervousness about ability of indigenous forces to handle job alone, especially in border areas where militia activity reported in recent months.